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Notice given 19 June 2003

1558  Senator Harris: To ask the Minister for Revenue and Assistant Treasurer—Given the ruling by the Federal Court in 2001 in relation to mass marketed tax-effective investments (MMTEIs) and the seriousness with which the Australian Taxation Office (ATO) regarded MMTEIs: Have any firms been brought before the Tax Agents Board as a consequence of the failed MMTEI’s Federal Court case; if so, can a list of those firms be provided; if not, why has the ATO not commenced any action.

1559  Senator Harris: To ask the Minister for Revenue and Assistant Treasurer—

(1) Can the Minister confirm that in the recent Cooke case involving Horticultural Project No.1, Justice Stone said that:

(a) the Spotless case had little relevance to an Australian-based project with a clear commercial purpose;

(b) the ‘scheme’ considered by the Australian Taxation Office in relation to Messers Cooke and Jamieson must include only those financial aspects of the project of which Messers Cooke and Jamieson were aware; and

(c) Messrs Cooke and Jamieson’s testimony about the dominant purpose of the investment must be accorded due weight;

if so: (a) can the Minister provide an explanation as to why the Australian Taxation Office (ATO) relied primarily on Spotless in its administration of mass marketed tax-effective investment (MMTEI) taxpayers’ reassessments; and (b) in its administration of MMTEI taxpayer reassessments, how does the ATO treat a person who enters into a MMTEI, which included financial aspects of projects of which the taxpayer was unaware when entering the scheme.

(2) Has the ATO, in its administration of MMTEI taxpayer reassessments, ignored evidence presented by taxpayers, at the ATO’s invitation, in regard to the dominant purpose of their investment, contrary to the requirements in Section 177A(5) of the Income Tax Assessment Act 1936.