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STUDENT - PRODUCT ASSESSMENT TASK
Task Number 2 of 3 Task Name Case Study
National unit/s code FNSACC512 National unit/s title Prepare Tax
Documentation for
Individuals
National qualification code FNS50217 National qualification title Diploma of Accounting
RMIT Program code C5390 RMIT Course code ACCT5425C
Section A - Assessment Information
Duration and/or due date:
Week 12 in class
Task Instructions
Type of Product (tick which applies)
? Project
? Report
? Portfolio
? Case study
Summary and Purpose of Assessment
This is assessment task 2 of three (3) that students need to complete satisfactorily, in ordered to be deemed competent for this unit. This assessment is to be completed individually.
This assessment simulates a real-life work scenario of a tax agent and requires student to complete a range of tasks relating to:
1. The gathering and verifying of client data
2. The calculating of taxable income
3. The reviewing of compliance
*Please see Appendix 1 and 2 for additional details (receipts and payments)
Assessment Instructions
Lou Tide has come to see you regarding his most recent tax return. He has provided his personal details and some additional background information that will assist you in the completion of his tax return.
Personal details:
TFN 345765233
Name Lou Tide
Title Mr
Sex Male
D.O.B. 8.8.61 (aged 57)
Current residential address: 5 Five Ave Feaumaris Vic 3160
Postal address Use your tax agent’s address
Previous postal address 211 Glenferrie Rd Hawthorn Vic
Residency status Australian
Marital status Married (to Heidi Tide (DOB 6.6.59) whose TFN is 567899010, and has adjusted taxable income of $1,200; and taxable income of $2,000 including interest, they were married the whole year and have no dependent children)
First return or final return? No to each
EFT used or not? Used: BSB is 535140, account number is 92837465 and account name is Lou Tide
Tax agent details: Use your own name, tax practitioner’s number 27510 006.
Background information about Lou:
• Last year he prepared his own return but this year he comes to you.
• He took early retirement package from his job at Bottlemart as a project manager, aged 56 on 1.1.18(he had worked there for 25 years). He received that $44,000 as part of that package.
• In January this year he began an eco-touring business called “Environment Tours”, which organises two trips per year to United States. He accompanies the customers as tour guide.
• In addition he does casual tutoring at university (using a room/study at home dedicated to preparing lessons & correction) from 1.7.2017 to 30.6.2018.
*Please see Appendix 1 and 2 for additional details (receipts and payments).
You are required to:
1) Research to identify and discuss whether the four deposits are accrued or prepaid income or expenditure and therefore assessable income or otherwise. Discuss how to record the adjustment(s) to the value of an asset or liability; using Sectional references from the I.T.A.A. or other references.
Research whether the government co contribution has changed since last year. Conduct research to identify any updates to compliance requirements that apply to the client’s circumstances (see his Private Super contributions), with respect to co-contribution. Explain how you would establish recording and reporting requirements. (200 words max.)
2) identify the client data required to calculate taxable income and allowable deductions; so you can complete the Individual tax return for Lou Tide for 2018/19 including any worksheets necessary (you are required to use the 2015 tax return stationary provided). Ensure this complies with Australian taxation law and ATO rulings and timeframes, accounting principles, and practices, and organisational policies and procedures.
3) Prepare a letter to Lou Tide on their tax agent’s letterhead, with advice and full workings of his net tax payable/refund for 2018/19. Include in this letter the required ATO timelines to meet compliance requirements.
4) Identify any discrepancies or unusual features and Conduct research on the ATO website to resolve any that they have identified. It concerns the Loss on variations in foreign currency and the question of whether this is tax deductible. You should be researching the $250,000 balance election. You will also need to post a question on the ATO forum (https://community.ato.gov.au/ ) asking for expert advice and guidance regarding the loss on variations in foreign currency (international tax) from at least two specialists. You will be required to provide screenshots of this as an appendix to your assessment submission including their replies. You will need to explain how this advice impacted on their decision process and what advice they will provide to the client. (200 words max.)
5) Respond to an audit letter from ATO who wish to audit their client L.Tide, their client. please refer to the correspondence below:
6)
Where
You
How
Dear Mr. Phillips
This is to advise you that following our normal audit procedures you have been selected to be audited.
The audit if for the year ended 30th June 2019.
The audit will be focused on your work-related expenses. You will need to produce the appropriate supporting documentation in accordance with the income tax assessment Act 1997.
You and or your representative are required to attend our offices on the 27th November 2019 at 3.00pm. Please confirm receipt of this email and your attendance no later than 7 business days from the date of this email. Kind regards
John blogs
ATO
On behalf of the client, you are to draft a short response to the Australian Tax Office (ATO). Their email should be formally written (as above) and must:
• Acknowledge that you and your client will attend the meeting
• State that they will bring all necessary documentation
Meet with your teacher who will be acting in the role of the client. You will go through their tax return and to reassure them of their responsibilities and outline what is required by them in relation to the audit. You will also be required to obtain the client signature, their authorisation and endorsement as per legislative requirements.
will be provided some class time to work on this assessment, however it is expected that majority of the
assessment is completed outside of class.
Students will be assessed against the criteria listed in the marking guide in Section B of this task. To achieve a satisfactory result, students will need to address all criteria satisfactorily.
Instructions on submitting this assessment
You are to ensure that you name your documents appropriately according to the assessor requirements and upload the completed assessment on Canvas by the due date.
Conditions for assessment
• You must complete the task within the allocated time.
• Late assignments will not be accepted.
• This is an individual task that you must complete with minimal support from your supervisor.
• Assignments must be submitted attached to the Cover Sheet-. All sections of this cover sheet must be completed and signed by the student.
• Evidence of collusion or plagiarism will result in automatic failure.
• Use may be made of resources, written texts and classroom notes.
• All workings, assumptions and calculations must be submitted with the assignment in a legible form. See the
proforma for workings provided
• You are required to make and retain a copy of their work.
• Prior arrangement should be made with your tutor at least one week prior to the assessment due date if you require special or allowable adjustment to complete this task
• You will be assessed as satisfactory or not satisfactory. Your responses to all questions must be deemed as satisfactory for you to achieve a competency result.
• You can appeal the assessment decision according to the RMIT Assessment Processes
Instructions on submitting your project/portfolio/report
Ensure that you name your documents appropriately according to the assessor requirements and upload the completed assessment on Canvas by the due date.
Equipment/resources students must supply: Equipment/resources to be provided by RMIT or the workplace:
• Calculator
• Access to Word, possibly excel • Dividend statements
• Payment summaries
• Summary of client’s personal info, receipts, payments including capital gains info and business info, and motor vehicle info.

Section B – Marking Guide
Section B – Marking Guide
TASK:
Describe the product to be assessed
This assessment task simulates the typical activities of a tax agent.
Criteria for Assessment
It is recommended that for product assessments you divide your criteria into key sections and under each section clearly describe the criteria students must demonstrate Satisfactory Marking Guide
Minimum requirements to be met:
Y N
1. Student has:
• researched and discussed whether the four deposits are accrued or prepaid income or expenditure and therefore assessable income or otherwise
• provided how they could record the adjustment(s) to the value of an asset or liability (using Sectional references from the ITAA or other references)
• conducted research to identify any updates to compliance requirements that apply to the client’s circumstances with respect to co contribution Student must have:
• discussed whether the four deposits ($1000 each) are not assessable income for the tax year ending 30th June 2019 as they were received by the bank after the
2018/19 financial year
• provided an explanation of how they could record the adjustment(s) to the value of an asset or liability, making Sectional references from the ITAA or other references
• identified any updates to the compliance requirements that
apply to the client’s co
contribution
Refer to Benchmarks for case study (2019) – Part A for solution.
2. Student has:
• identified the client data required to calculate the taxable income
• complete the individual tax return for Lou Tide for 2018/19 (including any worksheets necessary)
• ensured that it has complied with Australian taxation laws, ATO rulings, accounting principles and practices and organisational policies and procedures Student must have:
• reviewed the client’s data and identified what’s required to calculate the taxable income
• correctly completed an individual tax return form for Lou Tide for
2018/19
• ensured that all practices has complied with the Australian Taxation laws, ATO rulings, accounting principles and practices and organisational policies and
procedures
Refer to Benchmarks for case study (2019) for solution.
3. Student has prepared a letter to Lou Tide on their Student must have:
tax agent’s letterhead, with advice and full workings of his net tax payable/ refund for 2018/19 • written a letter to their client (using their tax agent’s letterhead) and provided advice and clearly stated full workings of the client’s net tax payable/ refund for 2018/ 19
• letter must be formal and use professional language
Refer to Benchmarks for case study (2019) – Part C for solution.
4. Student has researched about the $250,000 balance election and discussed whether loss on variations in foreign currency are tax deductible.
Student sought expert advice and guidance regarding the loss on variations in foreign currency from at least two specialists.
Student must have conducted researched about common forex transactions and discussed about forex measures and show evidence of seeking advice from two specialists in the field.
Student must have also discussed what the $250,000 balance election is and how it could be helpful to taxpayers who do not have a large forex account balance.
Student in 200 words or less must explain how this advice impacted on their decision process and what advice they will provide to the client.
Refer to ATO link :
https://www.ato.gov.au/Business/Foreignexchange-gains-and-losses/Common-forextransactions/
5. Student has drafted an email to the ATO on behalf of their client and ensured that it:
• Acknowledges that both the client and themselves (student) will attend the meeting
• Stated that they will bring all necessary documentation
Student in 50 to 75 words must have drafted an email in response to the ATO:
• Confirming attendance
• Stated that the appropriate documentation will be brought along to meeting
Sample response:
Dear Mr John Blogs,
Thank you for your email.
I am writing on behalf of my client Mr Phillips to confirm that he will accept and comply with the audit he has been selected for in relation to work-related expenses for
the financial year ending 30th June 2019.
I can confirm that myself and Mr Phillips will attend the meeting scheduled on the 27th November 2019 at 3PM, and will bring the appropriate documentation in accordance with the income tax assessment Act 1997.
Please do not hesitate to contact me if further information is required.
Kind regards,
[name]
6. Student met with their teacher who will be acting in the role of the client. Student went through the tax return to reassure them of their responsibilities and outline what is required by them in relation to the audit. The student will also be required to their signature, authorisation and endorsement as per legislative requirements.
Refer to the observation checklist below.


TASK:
Describe the task – context and conditions for assessment.
The following actions to be observed are based on the activities outlined step one this assessment task.
Observation Checklist
List of actions to be observed Satisfactory
Not Satisfactory
Marking Guide
1. The student cooperates and communicates clearly with the client ? ? The student must demonstrate cooperation and appropriate communication skills with the client
Student must ask at least two (2) questions, offer at least one (1) idea/suggestion and provide an opportunity for the client to respond to the queries.
2. The student runs through the tax return with the client. The explanation of the tax return is straightforward and easy to follow.
3. The student outlines what is required by the client in relation to the audit including the responsibilities of the client as per legislative requirements and timings.
The student is aware of the audit process as per legislative requirements. The student explains the process regarding timings and what the client’s role is in in regard to the audit.
4. The student obtained the client signature, their authorisation and endorsement as per legislative requirements.
? ? The client was satisfied with the professionalism of the student, therefore resulting in their authorisation and endorsement to proceed with the filing of the tax return as per legislative requirements.

Section C – Feedback to Student
Has the student successfully completed the task? Yes No
Feedback to student:
Assessor Name Date
Appendix 1 – Receipts
Gross Salary (Bottlemart) see appendix 1
Redundancy payment (Bottlemart) see appendix 1
Interest -$50 in AnyBank Ltd joint savings account with spouse
-from 1 year term deposit account in Lou’s name, $1,700 credited 31 March 2019, and $1,800 will be credited on the 31 March 2020.
Dividends see appendix 2
Proceeds sale of shares:
• Sold 1,000 Boral Ltd shares on 1.4.19 for $6,000 net. Purchased 1,000 shares on 15.8.18 for $5,000. Additionally broker’s fees paid $29.
• Sold 579 Coles Myer shares on 15.12.18 for $4,850 net. Purchased 500 shares on 1.1.2003 for $6.50 each. Broker’s fees paid $42. In addition Lou participated in Dividend Reinvestment Plan receiving bonus shares in lieu as follows:
15.10.2011 10 shares $65 f/franked
12.10.12 10 $67
17.10.13 11 $77
1.11.14 11 $79
5.10.15 13 $86
31.10.16 12 $70
12.10.18 12* $74
*see also appendix 2
• Sold 200 MYOB shares on 1.6.19 for $1,050 net. Purchased 200 shares on 12.9.2003 for $2,000. Broker’s fee waivered as they were purchased upon the floating of the company.
Gross salary Monash Uni see appendix 3
Sale of used lawn mower on Gumtree $75 on 1.8.18. He bought it new on 31.12.2010 for $560.
Board money received from his son $2,000.
Compensation re. contents insurance recovery, house burglary $13,000.
Appendix 2 – Payments
“Environment Tours”
All equipment and the tour bus are hired over in the U.S.A. The business in Australia does not have any office premises (and Lou does not use home as a place of business), as Lou uses travel agencies to generate the advertising and take the bookings.
Food, clothing, toiletries etc for home $6,240
Lou drives a Subaru wagon 3 litre purchased some years ago for $37,000.
The following car expenses are all substantiated.
Car running expenses (registration $510, comprehensive insurance $325, RACV $65, fuel $1,145, repairs $800, parking tickets (penalty) $140, new car CD player [ 5 year life, $600, 1.4.19] , Interest on car loan $500, Repayment of loan principal $1,400, depreciation $2,188, new tyres $280, driver’s license renewal $160. Odometer readings are 1.7.2018 113,900 kms, 30.6.19 130,569 kms. Has not kept a log book. His diary setting out every business trip confirms business kms (“Environment Tours”) since 1.1.19 to 30.6.19 on “Environment Tours” affairs only are 1,000 kms.
Note: All travel to and from Lou’s jobs are private kilometres. Travel in his car for employment and for the business (“Environment Tours”) should be shown separately on the tax return.
Utilities (home):
Telephone $1,300
Telephone (mobile) $1,480
Electricity $1,050
Gas $890
Council rates $1,100
South East water rates (includes $653 water usage) $1,250
Note : he has a home office (111 sq.metres.) used exclusively for his Monash Uni job, in his private home which has total floor space of 1,238 sq.metres.
Expenses re tutoring position:
Teaching aids $45
Watch (to finish tutes on time) $150
Calculator $50
Diary, for recording matters like student information/questions $12
Purchase of “Age” newspaper (keep abreast of daily events) $175
Parking fine whilst visiting Tax Office $90
Cost of being in the union AEU
Expenses re project manager: $320
Purchase suit $340
Laundry of suit $140
New briefcase (with key, store confidential work records, 20 year life) $250
Purchase umbrella rainy days $29
Taxi fares from work to home on days finished late
Other expenses: $179
Your tax agent fee for doing 2018/19 return in November, 2019 $300
Donations (St. Vincent de Pauls Society $24, Monash Soccer Club $70, RSPCA $50, Red Cross $1)
Note: the RSPCA donation was for 20 raffle tickets)
Subscription – Athletics Weekly (journal) $52
Private superannuation (note Lou is sponsored by his new employer Monash University for super Guarantee minimum support; he was also sponsored at his previous employer) $1,000
BUPA premiums paid for hospital cover (family). Health insurer ID BUP, membership number is VCL123 $1,400.
Your share of Australian Govt rebate received $600, benefit code (L) 30; other adult beneficiaries Heidi Tide, and the tax claim code is C (you are claiming your share of the rebate).. He chose the reduced premium option.
Only complete that part of the tax return that you can.
Business Related items:
Income:
Prize for most innovative tour for 2019, awarded by Tourism and Travel Agent’s Assoc. Aust. Lou received a free trip for two to Beijing return airfare and five nights accommodation, plus six passes to various tourist spots, which is nontransferable.
Value of whole package $11,750
Fares collected -trip in June 2019- $91,286
-deposits (see below) re trip December 2019 $4,000
Income:
Four deposits of AUD$1,000 each were received and banked in respect of the next trip (Dec 28th 2019 to Jan 12th 2020) from four customers, up to the end of June 2019. All deposits are non-refundable if the contract is broken by the customer. They are refundable to the customer if Lou does not receive sufficient bookings to make the trip viable.
The first trip was successfully completed between June 10 & June 25, 2019.
Outgoings:
NB: U.S.A. expenses have been converted to AUD$
Bus and driver hire $24,579
Accommodation guests $18,000
Insurances – public liability $7,800
Lou’s airfares in June $4,100
In January (see Note 1) $5,180
Lou’s two sets of casual clothes especially to suit his role as tour guide $600
Accommodation in U.S.A. in January – 4 nights (Note 1) $800
Lou’s hairdresser $320
Premium for sickness/accident insurance –self $400
Entertainment of clients and travel agent staff $700
Loss on exchange rate variations (Lou held U.S. dollars totalling $75,000 in a bank account overseas, when the AUD$ was climbing, and lost when he converted his unspent foreign currency back to AUD$) $816
NOTE 1:
The trip in January 2019 was to establish travel industry contacts for the first time , with an agent based in U.S.A. that would arrange various travel arrangements for his customers at that end.
NOTE 2:
Lou estimates 60% of his mobile and landline phone bills are business related.