1. On 6 July 2017 Deputy President S A Forgie, under delegation from the President in accordance with s. 10A of the AAT Act, reconstituted the Tribunal and appointed me to conclude this matter. In doing so, I have had regard to s. 19D(4) which provides:

The reconstituted Tribunal must continue the proceeding. For this purpose, it may have regard to any record of the proceeding before the Tribunal as previously constituted (including a record of any evidence taken in the proceeding).

1. Accordingly, I have taken into account all of the documents which were admitted into evidence at the hearing. I have also taken into account a transcript of the oral evidence obtained at the hearing.

1. Section 14ZZK of the Taxation Administration Act 1953 (the Administration Act) provides:

On an application for review of a reviewable objection decision:

(a) the applicant is, unless the Tribunal orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates; and

(b) the applicant has the burden of proving:

• (i) if the taxation decision concerned is an assessment - that the assessment is excessive or otherwise incorrect and what the assessment should have been; or
• (ii) in any other case - that the taxation decision concerned should not have been made or should have been made differently.

1. In this case, Mr Tyl bears the onus of proving that the claimed expenses should be allowed and that he has satisfied any substantiation requirements if that be necessary, thereby reducing his taxation assessment. In addition, Mr Tyl bears the onus of proving that the administrative penalty decisions should not have been made or should have been made differently.

1. Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 97) is the general deductions provision. It provides:
   • (1) You can deduct from your assessable income any loss or outgoing to the extent that:
     • (a) it is incurred in gaining or producing your assessable income; or
     • (b) it is necessarily incurred in carrying on a *business for the purpose of gaining or producing your assessable income.
   • (2) However, you cannot deduct the loss or outgoing under this section to the extent that:
     • (a) it is a loss or outgoing of capital, or of a capital nature; or
     • (b) it is a loss or outgoing of a private or domestic nature; or
     • (c) it is incurred in relation to gaining or producing your *exempt income or your *non-assessable non-exempt income; or
     • (d) a provision of this Act prevents you from deducting it.
2. Subdivision 900-B deals with substantiating work expenses. Section 900-30 explains the meaning of the expression work expense. Travel allowance expenses are included in that meaning. Relevantly, it provides:
   • (1) A work expense is a loss or outgoing you incur in producing your salary or wages.
   • (2) Travel allowance expenses count as *work expenses. A travel allowance expense is a loss or outgoing you incur for travel that is covered by a *travel allowance. The loss or outgoing must:
     • (a) be for accommodation or for food or drink; or
     • (b) be incidental to the travel.
   • (3) A travel allowance is an allowance your employer pays or is to pay to you to cover losses or outgoings:
     • (a) that you incur for travel away from your ordinary residence that you undertake in the course of your duties as an employee; and
     • (b) that are losses or outgoings for accommodation or for food or drink, or are incidental to the travel.

(4) Meal allowance expenses count as *work expenses. A meal allowance expense is a loss or outgoing that you incur for food or drink that is covered by a *meal allowance.

(5) A meal allowance is an allowance that your employer pays or is to pay to you as an employee to enable you to buy food or drink. However, an allowance is not a meal allowance if it is a *travel allowance or part of one.

1. The general position regarding substantiation is set out in s. 900-15(1) of ITAA 97. It provides:
   • (1) To deduct a *work expense:
     • (a) it must qualify as a deduction under some provision of this Act outside this Division; and
     • (b) you need to substantiate it by getting written evidence.

Subdivision 900-E tells you about the evidence you need.

To find out whether an expense qualifies as a deduction under this Act, see Division 8 (Deductions).

1. While ordinarily a taxpayer is not required to produce documents substantiating deductions claimed in any income year, s. 900-175 of ITAA 97 provides:
   • (1) The Commissioner may give you a written notice telling you to produce records of expenses specified in the notice. The records must be ones that you have to retain for the *retention period: you do not have to produce records if the retention period for those records is over.
2. The retention period is defined in s. 900-165 as follows:

Whenever you are required to retain records and expense under this Division or Division 28, you need to retain the records for 5 years.

1. Section 900-115 deals with written evidence from a supplier. It is relevant in Mr Tyl's case. It provides:
   • (1) You may use this set of rules for any type of expense except the decline in value of a *depreciating asset.
   • (2) You must get a document from the supplier of the goods or services the expense is for. The document must set out:
     • (a) the name or business name of supplier; and
     • (b) the amount of the expense, expressed in the currency in which it was incurred; and
     • (c) the nature of the goods or services; and
     • (d) the day the expense was incurred; and
     • (e) the day it is made out.
   • (3) There are 2 exceptions to these requirements:
     • (a) if the document does not show the day the expense was incurred, you may use a bank statement or other reasonable, independent evidence that shows when it was paid;
     • (b) if the document the supplier gave you does not specify the nature of the goods or services, you may write in the missing details yourself before you lodge your *income tax return for the income year.

1. An alternative means of substantiation is provided in respect of a small total of small expenses. Section 900-125 provides:
   • (1) If your expense is small, and you have a small total of small expenses, you can make a record of the expenses instead of getting a document from the supplier.
   • (2) Each expense must be $10 or less, and the total of all your expenses that:
     • (a) are each $10 or less; and
     • (b) you incurred in the income year and wish to deduct; and
     • (c) you must get written evidence for under this Division;

must be $200 or less. These limits can be increased from time to time by regulations made under section 909-1.

1. There are, however, some exceptions to the general substantiation rule. Section 900-50 deals with the exception for domestic travel allowance expenses. It provides:
   • (1) You can deduct a *travel allowance expense for travel within Australia without getting written evidence or keeping travel records if the Commissioner considers reasonable the total of the losses or outgoings you claim for travel covered by the allowance.
   • (2) In deciding whether the total of the losses or outgoings you claim is reasonable, the Commissioner must take into account the total of the losses or outgoings of the following kinds that it would be reasonable for you to incur for the travel:
     • (a) accommodation;
     • (b) food or drink;
     • (c) losses or outgoings incidental to the travel.
2. Taxation Ruling TR 2004/6 deals with the substantiation exception for reasonable travel and overtime meal allowance expenses. That ruling is legally binding on the Commissioner. Paragraphs 13 - 15 of TR 2004/6 explain the substantiation exception in the following way:

13. The objective of the substantiation exception for travel and overtime meal allowance expenses provided for in Subdivision 900-B of the ITAA 1997 is to relieve taxpayers covered by the exception from the requirement to substantiate claims for deductible expenses by using detailed calculations, records or receipts. If a claim for expenses that are covered by a travel allowance or overtime meal allowance qualifies for exception from substantiation, it is not necessary to keep written evidence as would otherwise be required under Subdivision 900-B of the ITAA 1997.

14. A taxpayer can choose not to use the exception from substantiation. Each taxpayer can decide between maintaining fewer records and limiting a claim to the reasonable amount, which in some circumstances may be lower than the amount actually incurred, or keeping written evidence and claiming the full amount of deductible expenses incurred, which may be higher than the reasonable amount.

15. If a taxpayer relies on the exception from substantiation, they may still be required to show the basis for determining the amount of their claim, that the expense was actually incurred, and that it was for work-related purposes. What counts as evidence for a claim subject to the substantiation exception will vary according to individual circumstances and the nature of the expense.

1. TR 2004/6 at paragraph 16 sets out some common situations which may arise. The following are relevant:

16. Where a taxpayer receives a bona fide travel allowance or a bona fide overtime meal allowance and incurs deductible expenses in relation to it:

• Where the deduction claimed is more than the reasonable amount, the whole claim must be substantiated with written evidence, not just the excess over the reasonable amount.
• Where the allowance received is not shown on the employee's payment summary and is not greater than the reasonable amount and it is fully expended on deductible expenses, the allowance received is not required to be shown as assessable income in the employee's tax return. Where it is not shown, a deduction for the expense cannot be claimed in the tax return - refer to paragraph 12.
• Where the allowance paid by the employer is greater than the reasonable amount the taxpayer may still use the exception from substantiation if the claim for deduction is not greater than the reasonable amount. In that case the allowance must be shown as assessable income and written evidence is not required to support the claim.
• Where the deductible expense is less than the allowance received, the taxpayer must show the allowance as assessable income in the tax return, and claim only the amount of the deductible expenses incurred.

1. There is one other requirement the taxpayer must meet in order to qualify for the exception from substantiation. It is found at paragraph 18 of TR 2004/6 which provides:

For domestic or overseas travel allowance expenses to be considered for exception from substantiation, the employee must be paid a bona fide travel allowance. The allowance must be paid to cover work-related travel expenses incurred for travel away from the employee's ordinary residence, undertaken in the course of performing duties as an employee (subsection 900-30(3) of the ITAA 1997) and which involves sleep away from home. The work-related travel expenses must be for accommodation, or food or drink, or expenses incidental to the travel.

1. What the Commissioner considers to be a reasonable amount for the substantiation exception in Subdivision 900-B of ITAA 97 is set out in a Taxation Determination for each income year. For the 2012 income year, the relevant Taxation Determination is TD 2011/17. For the 2013 income year, it is TD 2012/17.
2. A Taxation Determination is a public ruling for the purposes of the Taxation Administration Act 1953. A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies or would apply to entities generally, or a class of entities in relation to a particular scheme or class of schemes. If the taxpayer relies on the ruling, the Commissioner must apply the law in the way set out in the ruling unless the Commissioner is satisfied that the ruling is incorrect and disadvantages the taxpayer. In that case, the case law may be applied to the taxpayer in a way more favourable to that person.

1. Both Taxation Determinations set out in tabular form reasonable amounts for accommodation, food, drink and incidentals. There are different allowances depending upon an employee's annual salary. In the 2012 income year Mr Tyl's PAYG Payment Summary records gross payments of $64,823 by way of salary. The allowances for employee truck drivers are found at Table 6. The preamble to that table states:

12. Amounts claimed up to the Food & Drink component only of the reasonable domestic daily travel allowance amounts for 'other country centres' are considered to be reasonable for meal expenses of employee truck drivers who have received a travel allowance and who are required to sleep away from home.

1. For salaries below $100,840, the following allowances are regarded as reasonable in the 2012 income year:
   • breakfast - $21.15;
   • lunch - $24.20; and
   • dinner - $41.65.
2. That amounts to $87 per day.
3. I had in evidence a letter from Mr Fumberger to the ATO dated 24 January 2014 in which he referred to Mr Tyl being paid a bona fide travel allowance in the amount of $11,340 for the 2012 income year. That accords with what is stated in Mr Tyl's income tax return for that year. That amount is also recorded on his PAYG Payment Summary for the 2012 income year.
4. Mr Fumberger said in his letter that Mr Tyl spent 252 nights sleeping away from home in the 2012 income year. According to Mr Fumberger, that figure was obtained by an examination of Mr Tyl's National Driver Work Diary kept throughout the year. Although I had in evidence extracts from Mr Tyl's Driver Diary, it is difficult from that document to determine precisely the number of days he was away from home having to sleep elsewhere overnight. In his oral evidence under cross-examination, when asked whether he had tried to work out the number of trips which justified his travel-expense claims by adding up the number of trips which he did in his logbooks, Mr Tyl said he did not.
5. In any event, the work-related travel allowance is calculated on the number of meals the driver consumes in the course of his work away from home. TR 2004/6 states, at paragraph 25:

In determining the reasonable amount to claim for meals, reference should be made to the period of the travel. That is, what meals (breakfast, lunch and/or dinner) would it be reasonable for that employee to incur during the period from the commencement to the end of the travel that are covered by the allowance, given the individual employment circumstances of the employee. The reasonable amount for incidental expenses applies in full to each day of travel including the first and last day.

1. If the driver were to leave his home after breakfast on the first day of a trip away from home, sleeping away from home on the first evening and then returning to his home before dinner on the following day, it is possible that his employer would give him an allowance for two days and not just the one night away. His reasonable allowance on the Commissioner's scale would not permit the driver to claim for three meals on each day. That is because he would not have consumed three meals away from home on that trip. His reasonable allowance would cover lunch and dinner on the first day and breakfast and lunch on the second day. That is of course assuming that he in fact paid for all of those meals. His reasonable allowance according to the Commissioner's table would result in a figure of $111.20. If it were calculated simply on the basis of two days away from home at a daily rate of $87 per day, that would amount to $174. It should be apparent that by counting the days away from home and multiplying the number of days by the daily rate is not likely to result in the correct claim amount. As explained by TR 2004/6, a deduction claim cannot exceed the amount actually incurred for work-related purposes. The payment of an allowance by itself does not permit a deduction to be claimed. Also, the Commissioner may seek verification of reasonable claims and the employee may be required to show how they worked out their claim and their entitlement to a deduction.
2. Mr Tyl's claim for work-related travel expenses in the 2012 income year ($20,790) was significantly in excess of his travel allowance. If it is accepted that Mr Tyl spent 252 nights away from home in that income year, Mr Fumberger calculated, by dividing the claimed amount by the nights spent away, that the claim amounted to $82.50 per day. Therefore, the claim was less than the reasonable daily allowance allowed by the Commissioner for the 2012 income year.
3. However, I had in evidence a letter from Mr Rod James, director of a corporate entity called Greengrey Pty Ltd which employed Mr Tyl as a truck driver. Mr James said that the travel allowance paid to Mr Tyl was $50 per overnight trip and that was recorded on each weekly payslip. That seems to be the best evidence regarding the travel allowance paid to Mr Tyl. On that basis, using Mr Fumberger's calculative method, Mr Tyl spent some 227 nights away from home in that income year. If that is the correct figure, and I were to adopt Mr Fumberger's method of calculating the daily claim, then his work-related travel claim would amount to $91.58 per day. That is in excess of the reasonable allowance made by the Commissioner. To compound Mr Tyl's problem, he did not keep receipts evidencing the purchase of the meals claimed. If Mr Tyl purchased four meals (lunch, dinner, breakfast, and lunch) for every night he spent away, his reasonable amount would be $111.20 for each overnight stay. That would make his reasonable amount for 227 nights away to be $25,242.40. The problem is Mr Tyl did not have the evidence to substantiate that expenditure. Nor did he in fact claim that amount.
4. As is stated in paragraph 16 of TR 2004/6, where the deduction claimed exceeds the reasonable amount determined by the Commissioner, the whole claim must be substantiated with written evidence, not simply the excess over the reasonable amount.
5. Mr Tyl attempted to substantiate his work travel expense claim by reference to a bank account, which was opened in his mother's name, for reasons related to his recent divorce. He said the records in that account disclose he paid for food and drink using EFTPOS. I had in evidence three pages of a NAB E-Banking account in the name of Mr Tyl's mother. It discloses transactions between 2 February 2013 and 2 April 2013.
6. The first thing that must be said is that the account is a very small snapshot of expenditure which relates to the 2013 income year. In any event, a brief analysis of the EFTPOS transactions discloses two or three relatively small transactions on individual days. Reasonably, it may be inferred that they relate to the purchase of something, possibly food or drink, while Mr Tyl was on a work-related trip. Even if they do, the amount of expenditure on any one day does not exceed $41.69, which was expended on 2 February 2013. That is well below the claimed maximum of $87 per day (in fact $89.60 per day for the 2013 income year). Rather than assist Mr Tyl, that evidence has the opposite effect.
7. I also note that on many occasions, there is a much larger ATM withdrawal immediately prior to a pay day thereby reducing balance of the account to a relatively small amount. I had no evidence regarding the use to which those monies were put. Those amounts were frequently in excess of $400. When asked about these withdrawals in his oral evidence, Mr Tyl said the withdrawals were conducted when he was at home rather than on a trip and while many withdrawals where executed at Mildura, which I understand is Mr Tyl's home base, some were not. Mr Tyl also said in evidence that he withdrew those monies to do shopping before he went away on a trip. With respect to Mr Tyl, that does not explain the sum of the withdrawal which had the effect of reducing the balance in the account to a very small sum shortly after his salary was deposited in the account.
8. In addition, while s. 900-115 deals with written evidence from a supplier of goods or services and one of the exceptions to the requirements refers to the use of a bank statement, more care needs to be taken when attempting to use that document as written evidence. In fact, the exception only applies where a document evidencing supply of goods or services sets out all the details required in subsection (2) but does not show the day on which the expense was incurred. The bank statement or other reasonable independent evidence may be used to show when it was paid. Therefore, the bare presentment by Mr Tyl of three pages of a NAB statement without the underlying receipt from the supplier does not meet the statutory requirement for written evidence. In cross- examination Mr Fumberger said that he kept copies of the bank statements because they were proof that the expenses had been incurred. Plainly, Mr Fumberger does not understand the statutory requirement.
9. Mr Fumberger's misunderstanding of the legal requirements in relation to substantiation of work related expenses is disclosed in many other documents lodged with the Tribunal. I am aware that Mr Fumberger has represented a number of other truck driver clients in respect of work-related expense issues. In those matters which were before me on hearing, I have mentioned to Mr Fumberger that he had a serious conflict of interest in acting for his clients. I have the same concern in this case. From the objections lodged by Mr Fumberger through to the documents prepared by him for the hearing of this matter and his oral evidence before the Tribunal, it is clear Mr Fumberger has simply sought to justify the grounds on which income tax returns were prepared for his truck driver clients. It is clear that Mr Fumberger does not understand the nature of a de novo hearing before this Tribunal. The Tribunal is not concerned with why the Commissioner arrived at his objection decisions on the documents presented at that time. The Tribunal may take into evidence other documents or witness statements which were not before the Commissioner at the hearing and it is required to arrive at the correct or preferable decision on the evidence before it at the hearing. It is only if the evidence presented to the Tribunal on hearing the matter causes the Tribunal to come to a different conclusion to that arrived at by the primary decision maker that a different outcome will result. Mr Fumberger's critique of the conduct of the Commissioner was extensive but of no value whatsoever to his client. That is not what this hearing was about.
10. For the 2012 income year, I find that Mr Tyl was required to substantiate the whole of his work-expenses travel claims because his claimed deductions exceeded the reasonable amount determined by the Commissioner for that income year.

1. Mr Tyl's gross income for the 2013 income year was $67,763. The relevant Taxation Determination for that year is TD 2012/17. The reasonable amount determined by the Commissioner for employee truck drivers on a salary below $104,870 is as follows:
   • breakfast - $21.80;
   • lunch - $24.90; and
   • dinner $42.90.
2. The total amount per day is $89.60.
3. Mr Tyl's total work-related travel allowance paid by his employer for that income year was $9,525. Mr Tyl claimed $20,706 for work-related travel expenses in the 2013 income year. Mr Tyl said in evidence that he did not go through his work diaries and calculate the number of nights he spent away from home in the 2013 income year. Nevertheless, Mr Fumberger said he went through that exercise which resulted in Mr Tyl spending 238 nights away from home. The problem with that is, as I have already mentioned as far as the 2012 income year is concerned, Mr James of Greengrey Pty Ltd said, in a letter dated 18 December 2013, that Mr Tyl received a travel allowance of $50 per overnight trip and that was recorded on each weekly payslip. If that figure is correct, then the number of nights Mr Tyl spent away from home in the 2013 income year was approximately 190 and not the 238 claimed on his behalf by Mr Fumberger.
4. Under cross-examination Mr Tyl was taken to the letter from his employer indicating that he was paid $50 travel allowance for each night spent away from home. The following questions and answers are recorded on the Transcript:

That's the letter that you're referring to...?... Yes, the letter from my boss. Yes.

That says $50 but you are not sure whether or not that's right. Is that correct?... It is always - like I said, I had don't think so it was right and whatever my boss was paying, that's how it went. And that's what - if it is $50, that's what it means, you know. That's the way it is.

But you have not checked to see whether that matches up with your payslips or something like that?... Well as I said, I never needed to so...

1. Mr Tyl did not put into evidence any of his payslips. It seems that the Tribunal on hearing the matter simply accepted Mr Fumberger's evidence or, more accurately, submission, that Mr Tyl's employer paid him $45 per overnight trip for both years in question. If that were the case, multiplying that figure by the claimed a number of nights (238) spent away from home in the 2013 income year results in a travel allowance of $10,710. Mr Tyl's PAYG payment summary for the 2013 income year only discloses $9,525. Accordingly, Mr Fumberger's claim that Mr Tyl was paid $45 per overnight trip cannot be correct. In fact Mr Fumberger did not say that he had looked at the payslips or that Mr Tyl had provided any such document to him. In his opening submissions Mr Fumberger said:

Yes. Thank you Deputy President. The employer's letter that we request from him on this matter - he actually quoted $50 in the letter.

Yes.

That actually showed up at times on payslips but it did vary and to the best of my knowledge - I might have to ask Mr Tyl if that's okay - what the - to the best of my knowledge I ascertain it was $45 per overnight trip in 2012 and 40 in 2013.

1. It is unclear why Mr Fumberger, very shortly after stating that Mr Tyl was paid a travel allowance of $45 per overnight trip for both of the years in question, suddenly changed that claim to $45 for 2012 and $40 for 2013.
2. With respect to Mr Fumberger, if, as he said the figure showed up at times on payslips, he must have had payslips before him at some stage. However no such document was tendered in evidence. When asked about that by the Tribunal, Mr Fumberger said: No, there are payslips. In any event, if there were doubt about how much travel allowance per night Mr Tyl was paid, Mr James could have been called to give that evidence or asked to produce payslip evidence relating to Mr Tyl's travel allowance. None of that happened. Without any evidence which contradicts the evidence of Mr James stating that Mr Tyl's payslips disclosed a travel allowance of $50 per overnight stay in both income years, that being the only reliable evidence, I find Mr Tyl was paid $50 per overnight stay in both income years.
3. Plainly, Mr Fumberger's calculation of the overnights Mr Tyl spent away from home has no basis or foundation. His figure of 238 has not been substantiated. He attempted to substantiate that number simply by stating that the allowance must have been $40 per overnight stay. While that does result in an annual travel allowance of $9,525, it appears simply to have been derived by Mr Fumberger on an assumption. It is not supported by the evidence. Even Mr Tyl did not confirm Mr Fumberger's assumption.
4. Again, using an overnight allowance of $50 per overnight stay, given that the total allowance for the 2013 income year was $9,525, the number of overnight stays must have been about 190 and not the 238 claimed on behalf of Mr Tyl. Given that Mr Tyl claimed a deduction of $20,790 in the 2013 income year for work-related travel expenses, that amounts to approximately $109 per overnight stay. It exceeds the Commissioner's reasonable allowance for employee truck drivers of $89.60 per day.
5. Therefore, as for the 2012 income year, given that the claimed deduction was greater than the reasonable amount allowed by the Commissioner, Mr Tyl must substantiate his claim with written evidence. Furthermore, only actual expenses incurred in work-related travel can be claimed as a deduction.

1. The Commissioner may exercise relief in certain cases where a taxpayer fails to substantiate claimed expenses. Section 900-195 of ITAA 97 provides:

Not doing something necessary to follow the rules in this Division does not affect your right to a deduction if the nature and quality of the evidence you have to substantiate your claim satisfies the Commissioner:

(a) that you incur the expense; and

(b) that you are entitled to deduct the amount you claim.

1. In his Objection Decision, the Commissioner took into account the fact that Mr Tyl had spent approximately half of each year away from home for work purposes. There was evidence of ATM cash withdrawals and it could be reasonably expected that Mr Tyl withdrew at least a portion of that money to cover food and drink while away from home for work purposes. The Commissioner allowed 25% of those withdrawals resulting in an allowable deduction of $7,405 in each income year. In my opinion, that discretion was appropriately exercised in the circumstances of Mr Tyl's case.

1. Section 284-75 of Schedule 1 to the Administration Act deals with liability to penalty. Relevantly, it provides:
   • (1) You are liable to administrative penalty if:
     • (a) you make a statement to the Commissioner or to an entity that is exercising powers or performing functions under a *taxation law (other than the *Excise Acts); and
     • (b) the statement is false or misleading in a material particular, whether because of things in it or omitted from it.
2. I have found that the statements made by Mr Tyl in his income tax returns for the 2012 and 2013 income years overstated the claimed deductions for work-related travel expenses because he was unable to substantiate those expenses at the time the claim was made. Mr Tyl did not keep receipts even though he should have been aware that he might be required to substantiate those claims. In making the claims he did, Mr Tyl made a statement which was false or misleading in a material particular. Accordingly, it follows I must find Mr Tyl is liable to administrative penalty.
3. There are exceptions to s. to 284-75(1). Those relevant to Mr Tyl's case are:

...

(5) You are not liable to administrative penalty under subsection (1) or (4) for a statement that is false or misleading in a material particular if you, and your *agent (if relevant), took reasonable care in connection with the making of the statement.

(6) You are not liable to administrative penalty under subsection (1) or (4) if:

(a) you engage a *registered tax agent or BAS agent; and

(b) you give the registered tax agent or BAS agent all relevant taxation information; and

(c) the registered tax agent or BAS agent makes a statement; and

(d) the false or misleading nature of the statement did not result from:

• (i) intentional disregard by the registered tax agent or BAS agent of a *taxation law (other than the *Excise Acts); or

• (ii) recklessness by the agent as to the operation of taxation law (other than the Excise Acts).

(7) If you wish to rely on subsection (6), you bear an evidential burden in relation to paragraph (6) (b).

1. I have found that the calculation of the number of nights Mr Tyl spent away from home for work purposes was not based on the evidence before either Mr Tyl or Mr Fumberger, his tax agent. That calculation was based on an erroneous figure of $40 or $45 paid to Mr Tyl as travel allowance. There was no evidence that those were correct figures and in fact the evidence was that the correct figure was $50 in both income years. Mr Fumberger said in evidence that he had seen the payslips even though they were not produced in evidence as they should have been. The error resulted in a claim produced by Mr Fumberger which claimed an excessive number of nights spent away from home in each income year. In making that error, Mr Fumberger erroneously advised his client that he was not required to substantiate his travel expense claims. Mr Tyl said that he did not look at his payslips or had not kept them and relied solely on Mr Fumberger to make the calculations. Those actions by both Mr Tyl and Mr Fumberger cannot be regarded as having taken reasonable care when entering the claimed expenses in Mr Tyl's income tax returns.
2. As for the subsection (6) exception, even if I were to find that Mr Tyl gave to Mr Fumberger all relevant taxation information, which I doubt was the case, I find that the false or misleading nature of the statements made in Mr Tyl's 2012 and 2013 income tax returns resulted from recklessness by Mr Fumberger regarding the operation of the substantiation provisions in ITAA 97. As a registered taxation agent, Mr Fumberger was at best, careless, or he possibly deliberately inflated Mr Tyl's claimed expenditure knowing, from the payslips provided by Mr Tyl's employer, that the number of nights he spent away from home was not what he claimed. Therefore, the subsection (6) exception cannot apply in this case.
3. The base penalty amount depending upon the circumstances is set out in a table located under s. 284-90(1) of the Administration Act. In this case, the Commissioner has determined in the Objection Decision that 25% of the shortfall amount should be the base penalty amount. That penalty rate is applied where the shortfall amount resulted from a failure by the taxpayer or his or her agent to take reasonable care to comply with a taxation law.
4. In my opinion, the 25% penalty applied by the Commissioner was the correct base penalty in this case. Both Mr Tyl and his taxation agent failed to take reasonable care to establish the correct number of nights Mr Tyl spent away from home in the course of his work. There were documents which were available to Mr Fumberger to accurately calculate the number of days away from home based on the daily allowance figure of $50 and the total work-travel allowance paid to Mr Tyl in each income year. It was then simply a matter of examining the correct table in each respective Taxation Determination in order to ascertain whether substantiation was required. That did not occur in this case.

1. I have found that for both the 2012 and 2013 income years, Mr Tyl was required to substantiate his work-travel expense claims. His claims in both years exceeded the amount considered reasonable by the Commissioner regarding food and drink for employee truck drivers set out in TD 2011/17 and TD 2012/17. Therefore, in accordance with TR 2004/6, the whole of the claims made by Mr Tyl required substantiation by written evidence. He was unable to produce that evidence.
2. Mr Tyl was able to point to a bank statement which disclosed a number of small ATM withdrawals, on many occasions multiple withdrawals on a single day. In his Objection Decision, the Commissioner took into account this material and exercised his discretion allowing 25% of what Mr Tyl had claimed. That resulted in Mr Tyl being allowed $7,405 in each income year for work-related travel expenses. I have found that to be the preferable decision.
3. I have also found that the Commissioner's decision to impose a 25% shortfall penalty on Mr Tyl was the correct decision in Mr Tyl's circumstances. He did not satisfy any grounds for exemption.
4. I find that the Objection Decision made by the Commissioner on 20 January 2015 was the correct decision. I affirm that decision.

I certify that the preceding 62 (sixty two) paragraphs are a true copy of the reasons for the decision herein of Mr Egon Fice, Senior Member

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