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Lodging tax return & backdated CSA assessment

Hi,

Have recently lodged the 2009 tax return via a tax agent (due date per ATO was May 2010) and now CSA have sent an amended CSA assessment for the period from the start of October 2010. Now there is an amount payable to CSA.

I thought if you lodged your tax return on time then they couldn't back dated CSA?

Any thoughts appreciated.

Thanks
LittleB,
          do you mean Oct 2009? I guess that you do. I am also guessing is that is the date when the assessment, current prior to the taxable income update, was started i.e. they amend the ongoing assessment. Here's what the CSA guide says :-

CSA Guide (extract) - 2.4.4: Child Support Income said
New information about adjusted taxable income for assessments after 1 July 2008

Where CSA has made a determination of a parents adjusted taxable income for a particular year and subsequently ascertains the parents actual taxable income for that year (when a tax assessment issues for the parent), the child support assessment must be amended immediately. CSA must also amend the assessment if it obtains other new information about a parents adjusted taxable income and makes a later determination of the appropriate adjusted taxable income amount (subsection 58A(1)).

The date of effect of the amendment to the child support assessment will be the beginning of the relevant child support period where:

(a) at the time, the parent has lodged, or still has time to lodge, his or her tax return on time as required under the income tax legislation (for example, under a relevant tax agent lodgement program); or

(b) paragraph (a) does not apply and the adjusted taxable income subsequently ascertained or later determined by CSA is higher than the amount previously determined; or

© paragraphs (a) and (b) do not apply and the parent was genuinely unable to provide CSA with timely information due to the parent being unaware that an assessment had been made, illhealth, natural disaster, remote location, imprisonment or other exceptional circumstances OR the parent resided overseas and was not required to lodge a tax return and the parent provided information about his or her income to the Registrar within a reasonable time in the circumstances (section 58A(2) and regulation 7B).

Otherwise, the amendment to the assessment will take effect from the date the adjusted taxable income was ascertained or determined, for the remainder of the child support period (section 58A(3)).

Example

M rings CSA on 20 July 2008 and advises their adjusted taxable income for 2007/2008 is $40,000. CSA uses that figure to calculate the child support assessment for the child support period 1 August 2008 to 31 October 2009.

0n 15 July 2009, Ms tax return for 2007/2008, lodged late, issues and their adjusted taxable income is $43,000. As Ms income is higher, the child support assessment would be adjusted from 1 August 2008.

If Ms adjusted taxable income was $38,000 then the child support assessment would be adjusted from 15 July 2009. This is the date the adjusted taxable income was determined, as this amount is lower and Ms tax return was lodged late.

Example

F has not lodged 2006/2007 tax return when child support period commences 1 March 2008. CSA determines an adjusted taxable income for 2006/2007 of $80,000 (from the taxable income in the year prior to the LRYI) and uses that figure to calculate the child support assessment for the child support period 1 March 2008 to 30 May 2009.

0n 1 November 2008, Fs tax return for 2006/2007 issues and their adjusted taxable income is $55,000. As Fs income is lower, the child support assessments would be amended using income as follows:

    * From 1 March 2008 to 30 June 2008: $55,000 (pre-1 July legislation);
    * From 1 July 2008 to 31 October: $80,000;
    * From 1 November 2008: $55,000 (s58A(3)) as Fs tax return was lodged late.

Here's a link to the section of the guide CSA Guide - 2.4.4

Yes, I do mean October 2009.

How do I know if the original assessment was made under s.58?

Also when does 58A rather than 34A (which seems to have different timing rules) apply?

Am I reading the guide correctly which states if you lodge on time amendments are retrospective but if you lodge late they are only prospective (unless you income has gone up, it which case it is also retrospective)?


This is very confusing stuff…

Last edit: by littleB

LittleB said
This is very confusing stuff…

If you read the legislation with the view of whatever reaps the greatest collection or transfer of monies applies, then it may be more simple to understand. Basically CS is a tax in all ways other than name and it's collection will invariably overrule the just.

As such I believe that you are reading the guidelines correctly.

I believe the confusion (obfuscation) is applied on purpose to allow the CSA to put the barrier of confusion before the Citizens and residents of Australia.  
So if you get your 2010 tax return in now then these figures will be used instead of your 2009 figures. If wont change what has happened in the past but will make a difference for the next 12 months.
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