Penalty for recklessness: Deduction claims unsubstantiated

In AAT Case [2013] AATA 671, Re Perry and FCT, the AAT affirmed the Commissioner’s decision refusing a taxpayer’s claim for tax deductions for the relevant year.

In doing so, it also affirmed the imposition of 50 per cent penalty on the shortfall amount for “recklessness”. The taxpayer was a car salesman who made unsubstantiated work deductions totalling $34,300.