Imagine that section 6 of the Tax Return Act 2024 (Cth) (the ‘TRA’) states:“If the taxpayer submits an inaccurate tax return, the taxpayer will be penalised with a fine equivalent to 3 times the tax that they ought to have paid.”The TRA was passed for the purpose of preventing tax underpayment.Homer, a man of high integrity who is nevertheless sometimes a bit naive, has been charged with submitting an inaccurate tax return under the TRA and the Australian Taxation Office is seeking a penalty under section 6. Homer stated a personal tax liability of $30,000 when it should have been $20,000 (meaning that he actually should have paid a lower amount of tax).Which statement or statements is (or are) most likely to be CORRECT? i. Homer’s lawyer will rely on a literal interpretation of the TRA.ii.  The ATO will seek to rely on an interpretation of section 6 of the TRA which follows the purposive approach.iii. Homer’s lawyer will likely argue that if we look at the purpose of the TRA, her client did not breach section 6. In this sense, this section should only apply to cases concerning tax underpayment (i.e. the rule does not cover cases about overpayment).iv. The ATO, arguing for a literal interpretation of section 6 of the TRA, will argue that Homer did breach the provision and, therefore, he must pay the fine. They will insist that section 6 of the Act does not distinguish between overpayment and underpayment and, therefore, the penalty applies in either case.Question 12Answera.Only (i) is likely to be correct.b.(iii) and (iv) are likely to be correct.c.Only (iv) is likely to be correct.d.(i) and (ii) are likely to be correct.

Imagine that section 6 of the Tax Return Act 2024 (Cth) (the ‘TRA’) states:“If the taxpayer submits an inaccurate tax return, the taxpayer will be penalised with a fine equivalent to 3 times the tax that they ought to have paid.”The TRA was passed for the purpose of preventing tax underpayment.Homer, a man of high integrity who is nevertheless sometimes a bit naive, has been charged with submitting an inaccurate tax return under the TRA and the Australian Taxation Office is seeking a penalty under section 6. Homer stated a personal tax liability of $30,000 when it should have been$20,000 (meaning that he actually should have paid a lower amount of tax).Which statement or statements is (or are) most likely to be CORRECT? i. Homer’s lawyer will rely on a literal interpretation of the TRA.ii.  The ATO will seek to rely on an interpretation of section 6 of the TRA which follows the purposive approach.iii. Homer’s lawyer will likely argue that if we look at the purpose of the TRA, her client did not breach section 6. In this sense, this section should only apply to cases concerning tax underpayment (i.e. the rule does not cover cases about overpayment).iv. The ATO, arguing for a literal interpretation of section 6 of the TRA, will argue that Homer did breach the provision and, therefore, he must pay the fine. They will insist that section 6 of the Act does not distinguish between overpayment and underpayment and, therefore, the penalty applies in either case.Question 12Answera.Only (i) is likely to be correct.b.(iii) and (iv) are likely to be correct.c.Only (iv) is likely to be correct.d.(i) and (ii) are likely to be correct.