David Koch is one of Australia’s foremost business and finance commentators and is considered one of the 10 most influential people of all time in the financial services industry. The widely known and respected “KOCHIE” as he’s affectionately called, also understands just how important the things we talk about are to small business because he even put up his own Tax Wish List for Christmas 2009 called “For Christmas I Want…A Simplified Tax System” and where  he said “I thought it might be interesting to put forward a wish list of initiatives” and further at (4) where he said (emphasis added)…

“Allow small business owners to claim part of their mortgage payments as a tax deduction when the business is run from home without sacrificing the CGT benefit. At the moment if you claim mortgage repayments as a business deduction you waive your CGT exemption rights on your home. A reversal of this law would really help small business owners”.

Well blow me down or maybe just blow me if you prefer ’cause given his significant depth of knowledge and outstanding reputation coupled with the fact he publically implied that the combined financial advice, taxation and legal professions have thus far failed to figure this out, then perhaps, you’ll concede that Deduct Your Home has actually done this very remarkable and equally tough job by itself and in so doing, that it even convinced the highest Authorities in the land to approve it but wait for it … WITHOUT ANY LAWS NEEDING TO BE CHANGED!

You can read David’s brief article here For Christmas I Want.. A Simplified Tax System.

Yeah, good on ya and thanks Kochie – mate you’re a ripper for effectively championing our years of ongoing commitment and hard work that stood up to beat such huge odds and yield these fantastic results!

So to all of Australia’s current and wannabe home-business owners;  don’t stress – THE WAIT IS OVER!!!

Make It Good Debt!

Hello again and welcome!

Without this blowing out to a diploma level explanation, I want to talk about asset sub-classes and in particular, I’ll zero-in on a nifty and not-so-little, UNKNOWN fact.

So let’s get started!

Most people know of the four main asset classes:

1. Property
2. Shares
3. Fixed Income (or Fixed Interest) and;
4. Cash

It is also argued that agribusiness is another asset class and now the latest emerging class seems to be “venture capital” however we won’t be exploring these here.

Most people also know that each of the four main above have many sub-classes.

As Property is the subject of the day, we’ll now break down its major subclasses:

1. Industrial
2. Commercial
3. Rural and;
4. Residential

As Deduct Your Home centres on the intelligent exploitation of your main residence as a part-business asset, I’ll now break down the residential sub-class:

1. Vacant Land
2. Houses
3. Terrace Houses
4. Duplexes
5. Triplexes
6. Quadruplexes
7. Townhouses
8. Villas
9. Units
10. Flats/Apartments
11. Condominiums
12. Penthouses
13. Lofts
14. Warehouse Conversions
15. Permanent Park Homes
16. Caravans & Houseboats (what the heck … I’m on a roll)!

I’m sure there are more but I think that will do for today.

Whilst these buildings are usually found in residential areas, there are of course many exceptions such as mixed use zones (inner CBD, redeveloped commercial or residential zones etc), where the new onus is one or the other and a smattering of the old remains. A common example is where an old character home is converted to professional suites etc. The substantive point however is in that in the main, residential buildings are used for residential purposes.

When you decide to start a small business, you have a number of options in terms of how you want it to operate and from where you want it to be based. For example a:

• Home
• Office
• Studio
• Factory / Workshop
• On-Site (e.g. professional contractor, trades-person, performing artist etc)
• Mobile Business
• Hobby farm/market garden, horticulture, viticulture etc

Whilst there may be others, I’m certainly struggling to think of any at the moment!

Looking at this list, only four (home, on-site, mobile, rural etc), are sufficiently flexible in terms of what I get excited about and that’s because they can each be carried on within your home as being the principal “Place of Business”.

On the contrary, if you work from say a separate office, studio or workshop etc, the ATO does NOT allow you to take some work home with you from time to time nor every day even, such that you may treat part of your home (i.e. where you carry out that work) as a place of business. The Commissioner’s view was clearly established on 30/09/1993 in taxation ruling TR 93/30 as well as subsequently by the courts, that such an area or areas will be merely considered a “home study” and this is true even if that is the ONLY activity you conduct in that part of your home.

If this sounds like your scenario, the good news is that you will NOT incur a capitals gains tax liability if you sell your home for a profit in future.

The bad news however is that that you will NOT incur a capitals gains tax liability if you sell your home for a profit in future.

And NO- that wasn’t a typo!

You see, there’s nothing better than incurring a whopping-big-fat-mother of a CGT liability – oh yes – it’s a very, very sweet thing and that’s because you’ve probably pulled-in a healthy sum at sale and that long-before, you passed the “interest deductibility test” which also then means if you knew what you were doing (and however which I’m apparently struggling to find anyone else out there who does), that you claimed all your mortgage interest, water and council rates, building insurance, building depreciation expenses and more for years and years as you enjoyed the ride leading up to your BIG PAY DAY!

*^!#%@ Confused?

*^!#%@ Bedazzled?

*^!#%@ Plain stumped?

*^!#%@ Think I’ve been smoking some whacky?

And so you should be because it would seem I’m the ONLY PERSON to have ever gone public with this apparently crazy, crazy stuff!

So what’s all the “hoo-hah” surrounding a NEW ASSET SUB-CLASS then?

Think about it…

You’re generally not allowed to live in an office, studio, factory or workshop etc – right?

Equally, folks do not claim their home mortgage and other occupancy expenses because their accountants all tell them it isn’t worth the dreaded CGT implications and this then means they miss out on claiming thousands every year in normal business deductions on their home – right?

We LUV being different and that’s why we spent several years figuring out  how the system has long legally allowed us all to NOT pay any CGT on that BIG FAT CGT LIABILITY that you and your accountant, financial adviser and lawyer, still haven’t figured out as to the how and why it is DEFINITELY IN YOUR BEST INTEREST TO HAVE RAISED and which not even The Government knew or understood until We “Wrote The Book” and then laid it on the table for its own agency (The ATO), to study and learn from (in-strict confidence and yes I know it all sounds rather unbelievable but … them is the facts)!

I can’t tell you much more for now except that it’s mere child’s play …  if you know what you’re doing!

(imagine trumpets)

Da, da ,da ,da

“behold”

“RESIMERCIAL“

INFUSED, RESIDENTIAL – COMMERCIAL PROPERTY

And here’s what “Resimercial Property“, i.e. what I’m calling the word’s latest asset sub-class currently looks and feels like:

• Residential property in appearance and by design and construction

• Zoned residential

• Comes in any floor plan (multi-level/guest wings/open-plan/ rooms off a long corridor/ alfresco areas/ bits of everything – it doesn’t matter)

• GST free at sale (unlike commercial property)

• A wide range of home business & or home occupations are allowed to operate within by practically all Australian local governments

• Some councils have no restriction on amount of floor space allocated for business use

• All bona-fide, typical business property tax deductions can already be claimed under existing legislation (e.g. same as non, home-based business properties)

• No detrimental effect on CGT main residence exemption per the non-business use of the property (for sole proprietors, partnerships and private companies)

• Any CGT raised from business use of the property is easily and legally reduced if not totally eliminated

• Favourably rated by State and Local Governments as residential property (and with certain residential exemptions still applying e.g. land tax)

Whilst I have no expectation of being contacted in the affirmative, my door is open if there’s a living soul out there in “think very carefully before you speak land”, who can tell me what other asset class or sub-class offers all this upside without any discernable downside, as if so, we need to talk!

So there it is folks – something brand new for you to invest in (and you might already even have one without having to invest anything – just a few tweaks needed here and there I suspect).

Ain’t she a beauty!

Make It Good Debt!

Welcome to the very first blog post of my life!

Now back to the headline …. that’s right! A few months ago our esteemed corporate regulator phoned to request our cooperation in sending them all the materials we’d developed to ensure this wasn’t some shonky unlicensed financial services business (and whilst I can never be completely sure, I’m about 90% sure that some snotty nosed weasel working for a major Australian professional association dobbed me in ’cause he or she reckons I’m a smarty pants for saying to the world that I can get results for you that so far no one else knows how – well stuff that person – they need to get their own life)!

I’m sorry where was I – oh that’s right!

Of course we told them they’d be wasting their time but they insisted so the next day I sent in everything I had that was worth reading and about a month or so later ASIC phoned again to say their investigation was complete and that as far they were concerned, they’d be taking no further action (that is unless and until they should ever receive new info that things had changed for the worse).  I asked them to put that in writing for me but they refused.

So what could I do but to accept that?

Looking back and to their credit, they did the right thing by conducting their due diligence and we take this opportunity to publically express our sincere thanks to ASIC for setting the matter straight and you know it actually feels good to know they’re watching. It’s kind of like Big Brother’s looking out for your best interests by keeping tabs on a little company like us that’s blazing a totally new trail.

Shucks – we’re actually a bit flattered to be making waves.

Make It Good Debt!

There’s Commonwealth legislation known as the Tax Agents Services Act 2009 setting out that only a registered  tax agent can  advise you on your obligations and entitlements under a tax law and that only they can represent your dealings with the Commissioner and we don’t have a problem with that.

Unfortunately though, unless we can get through to YOUR accountant and that in turn he or she can get through to you (without the details being lost in translation),  then they’re in no position to fully, safely and therefore properly advise you on how DEDUCT YOUR HOME saves you thousands every year in income tax without paying any capital gains tax at sale.

We know it’s crazy but that’s just how it is.

It’s no secret that we’re not registered tax agents so after giving this much thought, we wrote to the Tax Practitioners Board and provided it with copies of all our technical and training documents etc, to have secured its formal permission that DEDUCT YOUR HOME may sit with you to help you tap into our specialist knowledge, unique practical experience and unmatched expertise, to ascertain what could be in your best interest  to thereby help YOU submit an application for your own ATO private binding ruling. As you may know, a private ruling is the highest legal protection a taxpayer can get and they’re free to obtain.

What this means is that we have secured a very, very special place in history as Australia’s first and only approved provider to the supply chain to market of what is without doubt, an ultra-advanced level of specialist knowledge for end-user consumption. Not bad perhaps for someone who started a business dealing in high-level tax law and who dropped out of uni at 19 to go full-time in a rock band because he founding the accounting course so damn boring – but hey, I digress!

Our intense research over the last several years has proven that the taxation advice industry at large, cannot even closely attend to your home business taxation advice needs at the level we can show you to do for yourself. Our systems and materials allow you to take charge of your affairs in an unprecedented manner and to dish-out “instructions” to accountants so they can properly attend to your business taxation compliance matters.

If you want your accountant to “advise” you on what we can teach you to do for yourself, that’s fine but you’ll need to get them in touch with us so we can train them and they’ll need lots of it!

So talk to me, Frank Genovesi, Executive Founding Director of DEDUCT YOUR HOME and I’ll do for you what noone else can which is; teach you (in plain language), how to easily claim tens of thousands or more every year in tax deductions on your home to improve your lifestyle and increase your wealth and by sticking to the rules, these benefits will definitely flow and thick and fast and no one gets hurt.

Make It Good Debt

Being day one of 2011, I can’t help but brim with positiveness in light of my anticipation for a very bright new year for this most unique business and that’s because our success depends on your success and further that in my worst nightmare, I simply cannot see people NOT wanting to be better off and so the circle will continue to turn and people will talk and take positive steps – no matter what!

I predict this year will see hundreds if not thousands of customers take up one of our SET UP FOR LIFE “Procedures” simply because they’re fed up with the treadmill of life that’s getting them nowhere fast or perhaps somewhere, albeit very slowly.

In saying so however, I reiterate that our “Procedures” are NOT a quack bunch of “get rich quick” schemes.

Au contraire, they are robustly engineered to enable anyone to run a legitimate home-business and to prosper in six main ways that  few out  there have still yet been able to get their head around:

(i)    The business will hopefully make a handsome profit and for many years to come!

(ii)   Before any tax is payable on those profits, most operators will be able to offset tens of thousands of dollars in tax deductions as generated from their home property (and these deductions would otherwise not be possible despite the existence of those costs anyway)!

(iii) If the business runs at a loss for any time, those losses are either quarantined against future profits or offset against “other” income in that tax year (as depending on the business structure)!

(iv) If you should sell your home-business property for a handsome profit and despite having claimed off your taxable income tens of thousands or even more every year in mortgage interest, council and water rates, building depreciation and building insurance, you need not pay a single cent in capital gains tax – ever!

(v)  If set up our way (i.e. the smart way), the immediate and ongoing lifestyle benefits are indisputably SECOND TO NONE (i.e. you can live in  nicer home in a better area in the course of running almost any business, meaning the tax system subsidises the cost of the home-business property) and;

(vi)  Most people have no trouble accepting that in the long run, a superior property in a superior position /location, should outperform an inferior one and therefore create significant additional wealth for its owner!

Take it from me here and now – the days of slaving away to pay off your home AFTER paying tax on your earnings are clearly OVER!

This is your golden opportunity to wake up, pay attention to something that can save your life in many ways and to then smarten the heck up  otherwise you will most definitely stay down in that colossal black hole of “blanketed ignorance”  which very highly likely, you and everyone you know lives in (and as probably also, a huge pool of debt that you’re equally trying to get out of  … that’s right, Australian average national household debt has never been higher)!

To let you in on a little secret, “In general, every industry, commerce, profession and society has and will always continue, to treat you like a slave to the wheel and a blind, deaf and dumb sucker to meet its own needs (i.e. the needs of the very few at the top),  for as long as you foolishly let it”.

If you want to break-free of the rut and assume true command over your life, then  you need to decide to turn your bad debt into good debt and if you don’t have any debt, you should look closely at getting a healthy dose of good debt as a step in the right direction (think of it a taking pro-biotics to ensure the right balance of good versus bad bacteria in your body). Otherwise don’t you dare complain when the boss hassles you for whatever reason or when you get knocked back for that promotion or when interest rates, fuel prices, utilities, insurances and  even groceries and other items rise as you will be in NO POSITION AT ALL to do a damn thing about it other than to “opt-out” (whatever that means to you). In stark contrast, however, such “bad news” is never “as bad” when you run under a SET UP FOR LIFE Procedure and you’d better believe the good days are always a lot better!

Make It Good Debt!

Further to my entry back in June WE’RE UNDER FORMAL REVIEW BY THE ATO AGGRESSIVE TAX PLANNING UNIT & WE COULDN’T BE HAPPIER!, we’re delighted to announce that yesterday (24th August, 2010), we received a letter from the ATO confirming the formal review into the possible application of the promoter penalty laws to our businesses was concluded and presently that in respect thereof, no further action is required on their part. To be clear, the purpose of the formal review was so the ATO could assess any risks Deduct Your Home and it’s sister business for professional adviser use (BetterLifePanel), posed to the community under these laws as contained in Division 290 of Schedule 1 to the Taxation Administration Act 1953.  The promoter penalty laws exist specifically to deter or punish promoters of illegal tax exploitation schemes (i.e. the name  collectively given to illegal tax avoidance and tax evasion schemes) and which confer upon  the Commissioner,  the power to seek  voluntary undertakings, statutory or civil injunctions and or civil penalties through the courts against the promoters of any such illegal schemes.

Reproduced below in italics is an excerpt from that letter (with confidential ATO contact and other non pertinent details removed):

MR GIANFRANCO J GENOVESI 11 DUCHART WAY COOGEE   WA  6166	Reply to:	GPO Box 9977 PERTH  WA  6848
	Our reference: Contact officer: Phone: Fax:	xxxxxxxxxxxx xxxxx xxxx xx xxxxxxxx xx xxxxxxx
		24 August 2010

24 August 2010

Risk review – finalisation letter

Dear Mr Genovesi,

We have completed the risk review to establish any possible risks under the promoter penalty laws.

There is at present no recommendation for Aggressive Tax Planning to undertake the compliance function of a civil investigation as outlined in Practice Statement PS LA 2008/7; however, this does not preclude Aggressive Tax Planning from undertaking this function at a future time.

As you may know, the many and various existing ATO Practice Statements are the Commissioner’s formal and obilgatory internal  procedural directives to his subordinates on how they must conduct certain functions. Accordingly, Deduct Your Home has drawn the nexus for you from the above reference to Practice Statement PS LA 2008/7, to its relative and authoriative paragraph 47 of which we’ve taken the liberty to reproduce below in italics for your convenience.

Making a recommendation regarding promoter penalty action

47. If active compliance work indicates that prohibited conduct has occurred, Promoter Compliance staff should make a written recommendation about promoter penalty action to an appropriately authorised decision-maker (see paragraph 48 of this practice statement) for the promoter penalty laws. This recommendation should summarise the available evidence and outline the relevant factors in favour for and against the recommendations made.

For those wanting to read PS LA 2008/8 in its entirety, please open a new window and simply copy and paste the following URL into your browser:

http://law.ato.gov.au/atolaw/view.htm?DocID=PSR/PS20088/NAT/ATO/00001

Of course the ATO has not locked our file and thrown away the key as it is entitled and what’s more expected, to  respond to any  new developments that may one day arise in so far as our possibly posing a compliance risk to the community (the same as for any business really) and to which we’re  unopposed as it would be doing the right thing. However to faithfully consider the extraordinary lengths we’ve gone to over the last five years or thereabouts, just in proving our goodwill  to the community, means you should now  have no hesitation in explicitly trusting in our committment to our core values and how that means we’d never throw our hard earned accomplishments and associated self-respect away by stupidly morphing into an illegal operation.

The fact is that we we’re never in doubt and that all in all and despite this formal review having taken four arduous months and sucking a lot of oxygen out of the tank, hell-yeah … it was worth every bit of the pain just to finally get it in writing.

We also take this opportunity to remind you  that in February 2009 at our specific request, the Commissioner examined  our arguments and motives before deciding in accordance with established protocol under PSLA 2008/4, to assist our efforts to keep our intellectual property  from the public domain (additionally as contained within the materials more recently submitted during this past formal review). This was done via the process of vastly editing the IP out of our private ruling as destined for publishing in the register at www.ato.gov.au. Of note, PSLA 2008/4 states that information already in the public domain cannot be confidential hence we therefore ask you to consider that on this very reasonable basis,  it’s absurd to suggest the Commissioner would not know what is and isn’t already in the public domain in regards to tax related matters as put before him for intense scrutiny and comment at a highly technical level. Accordingly, we take this definitive action as a very strong show of support that the IP is indeed ours (and as verbally admitted to us on 28/06/2010 during a formal recorded interview) and despite the ATO not being in the business of formally acknowledging or granting IP rights (that’s IP Australia’s role with whom we’ve had significant other dealings in obtaining three registered trademarks).

Consequently, you can now  conduct your business with us in full confidence that as the undisputed pioneers of our field and in total contrast to mainstream professional thinking and to our considerable knowledge, we are Australia’s only firm that understands the  truth and the magnitude of  this incredible opportunity now at hand.

We further remind you that we’ve set in place for your immediate consumption, a tantalising menu of client-ready, turn-key “Procedures ” ensuring you’ll get your fair share of the good stuff.

When considering our proposal for your betterment, the abundance of evidence we’ve gathered as we’ve gone about our business of securing Australia’s highest authorities (i.e. The Government’s and the ATO’s), various levels and modes of confirmation of our unique position and our claims to the market, means that noone else comes close.

Make It Good Debt!

If you open the financial section of any newspaper or watch or listen to the financial news, read business portals online or allow yourself to be purposely exposed to other form of business and financial media and if you pay any attention at all to the constant advertising bombardment that your eyes and ears are subjected to every day just watching or listening to ordinary commercial tv and radio, then you may agree that we our drowning in a sea of complex information and enumerable claims and offers on how to create wealth and improve lifestyle and yet, there is more risk and ambiguity than ever before. The gap between the rich and the average is ever-widening whilst the poor old “poor” barely get a look in!

Stop wasting time with those who obviously don’t know how to help you to save thousands every year on unavoidable, home expenses.

Make It Good Debt!

After I conducted thousands of appointments in personal practice as a financial planner, I founded Deduct Your Home  on the underlying principle that it’s wrong for you to give up your “power” to someone else, just because they specialise in something.

I say YOU must always be in control i.e. the one to “call the shots” and that knowledge and perhaps even more importantly, perspective, are the keys to intelligently and effectively wielding that power.’

By this I mean that of course you don’t have to know everything your advisers know about how to do their jobs and nor would you want to but as the “BOSS”, you do need to remember that everyone works for YOU and that’s why you need the vantage point of overall perspective, to ensure you always know what it takes to succeed at every turn and whether or not everyone on your team is doing their part as necessary!

Naturally in setting you up to save tax, build wealth, retire more comfortably, live a better lifestyle, enjoy a nice home in a better area and more, you won’t want anyone making strategic or procedural mistakes and so perhaps for the first time in your life and in a relevant manner of speaking, our system fairly and squarely puts you  in the driver’s seat!

Make It Good Debt!

Hello and welcome back!

Further to my last entry THE ATO REALLY SHOULD MAKE OUR PRIVATE RULING AND NOT COP OUT LIGHTLY!, last December, I managed to obtain a very warm inside referral from the manager of high net worth, private client wealth planning of one of the big four banks (hint it’s got three letters – well so do three of the four but that’s all I’ll say). It was later agreed to check us out in relation to our home-business Procedures etc. Having sent detailed presentation materials which clearly spell out very plausible possibilities for millions of clients and of which the bank could not currently understand how to accomplish absent my explanation (e.g. how to; save thousands every year in tax, save thousands every year in property expenses, build significant personal and business wealth, retire better off, live in a nicer home in a better area etc); I am bemused that my further emails and telephone calls remain unanswered. Perhaps it’s just my natural tendancy to want to be well-informed on breaking matters of paramount interest that would have me wanting to know as a major player in the Australian financial services landscape, just exactly what it is that some small-fry, smart alec like me thinks he knows (if anything)! I’m not taking it badly though as in this day and age, to have even obtained such a powerful opportunity to present is rare at best so on that front, some might say “I done good”. I wonder if I should make contact one more time (once I have that anticpated green light from the ATO in writing in about a week).  Hhmmnn???

Furthermore and over the last month or so, I’ve been dealing with another of Australia’s oldest and largest financial services organisations (definitely another three letter household name but strictly speaking, not just a bank), hoping to do a deal to roll out our Procedures en’ masse via a national network of nearly 1300 financial planners. Again I recently provided a detailed powerpoint presentation on the many merits of so doing etc however just this Thursday,  I received a call from my contact within, to explain that my offer to explain my IP in detail (under cover of our standard confidentiality deed), had been declined as the the conservative giant whale was just too afraid of being such a big target for the ATO (assuming there were unsettled tax issues). I briefly said they had it all wrong but to no avail.

These two cases alone illustrate that the larger the ship, the harder it is speak to the captain and to steer the damn thing – I’ve always known this but have lived in hope nonetheless.

It would also appear that there’s a distinct lack of desire amongst the heavyweight Australian financial corporates, to even want to know the nuts and bolts of  if and how all this “stuff” works before deciding that it’s not for them. I find it all very disenchanting when I think of the enormous databases of clients who may never get to learn of the amazing options that are now available to them.

Indeed I wonder if the “best interests” of clients of these oranisations ever really get a look-in as when the status-quo is one of continuing to earn record profits, what becomes apparent is  “if the wheel ain’t broke – don’t fix it”!

It’s a crap attitude I know so I’ll just keep on keeping on to help my fellow citizens; even if one at a time then.

Nothing wrong with that!

Make It Good Debt!

Further to my last entry ASIC (OUR FINANCIAL SERVICES REGULATOR), IS SATISFIED WITH US! , hmm, let me see. About mid April I think it was, I received a call from The Director, Aggressive Tax Planning Unit (The Director). She was somewhat concerned about some statements on another web site I still have running in connection with all this and reckoned I was effectively saying that my business is “endorsed” or “approved” by The Fed Govn’t and the ATO whereas she also stated that the ATO’s policy is NOT to approve or endorse any business. Well I stuck to my guns saying I strongly disagreed as I had written confirmation from The Fed Treasurer that The Fed Commissioner of Taxation had suggested I might invite my future clients to do a particular thing in relation to getting the Fed Government’s assurances in connection with purchasing my company’s information product and implementing its content into their own lives and hence how that amounted to approval for my company to market its goods in this certain manner. She was adamant and said that if I didn’t comply with her requests, she’d refer the matter to the Australian Competition and Consumer Commission (ACCC), for further investigation. I implored her to seek competent legal advice as I thought it would be in everyone’s best interest that her unit was professionally appraised of the situation rather than continuing to seemingly make it up as she went along in areas of which it equally appeared that she was neither qualified nor competent (she’s an ATO investigative officer and not a commercial litigation lawyer after all)! I also told her that I had no problem with her going to the ACCC if that’s what she wanted to do other than that I thought it would be a waste of her time and energy as I knew I had no case to answer in respect of Section 52, The Trades Practices Act 1974 (Cth) [Misleading and Deceptive Conduct}.

After sleeping on the matter and because I value our good relationship which has ensued over several years of close interaction in obtaining a bunch of awesome private rulings in the course of developing my company’s offering of intellectual property and knowing I wasn’t obligated to do anything, I made some changes just to please her and I ‘m happy to have done so as a bit of give and take in this world is a good thing – don’t you agree? Anyway, I’ll be totally revising that site soon and gearing it solely to the professional adviser market.

Getting back, well, I’m sure you know how it is. One thing leads to another and all of a sudden it's April 21st 2010 and I'm sitting at the tax office in a small, bland room with no pictures on the wall, for an informal discussion or so I thought and it’s just them and yours truly but then it kind of changed into something else but I’ve gotta say – I didn’t mind it at all and to be honest – I enjoyed it. They’re very nice and polite people with an important job to do and they’re not evil – a major pain in the arse yes because that’s the process – but definitely not evil! You see, deep down, you know if you’re a crook or a scammer or whatever you think it is that you really are and I guess that’s why I didn’t mind being there although it’s not like I don’t have other things to do.

Low and behold, the very next day on 22nd April 2010 I had a brainwave so I emailed the Director and asked that given her title "Director, Promoter Compliance | Aggressive Tax Planning" if she'd advise me if and how the Promoter Penalty Laws impacted my business as I simply thought this was in the best interests of all concerned (i.e. The ATO, my business and its intended future clients and partners).

Take a look here to see the email I sent (name withheld for legal reasons) ...

From: Frank Genovesi [admin@betterlifepanel.com.au]

Sent: Thursday, 22 April 2010 11:49 AM

To: “Name Withheld”

Subject: Promoter Penalty Rules

Dear “Name Withheld”,

Given your title; Director, Promoter Compliance | Aggressive Tax Planning, lucky for me, you’re probably the right person to advise if and how the PP rules impact upon my business (emphasis added), as I’ve been meaning lately to write in on this one anyway!

Having closely studied them several times, I can’t see how they can apply but in case I’m wrong, consistent then in my proactive nature to compliance, I’d rather be the one to bring it up at this early juncture rather than cause any damage (remember the facts are as I said yesterday that no one has taken me up on anything yet). Hence; your  timely reassurance in this matter would be most appreciated.

I’ve briefly outlined my reasoning below in an effort to assist in making your own determination (emphasis added):

1.                  No Product Ruling exists or is otherwise contemplated that could allow any “scheme” to be implement in a materially different way.

2.                  The Commissioner has already ruled (four times actually) that my scheme, the subject of mine and my company’s various PBR’s, are not subject to Part IVA given the sole or dominant purpose is NOT to obtain a tax benefit but rather, lifestyle benefits.

3.       My PBR application’s description of the scheme clearly explained that private and business areas of a home are to be exclusively or almost exclusively set aside and used as such (not for mixed use).  Accordingly, the FCT effectively ruled that no private expenses of the family were being claimed as business expenses  under the scheme so why would the ATO go to the considerable trouble of attempting to manufacture an interpretation of  this to mean something else than what it is i.e. the literal truth. As such, it renders oxymoronic, any further suggestion on its part of any semblance of tax avoidance etc.

4.       Points 2 & 3 provide undeniable “Authority” from the ex-chief tax counsel who is now the FCT that no tax evasion, tax avoidance or tax exploitation etc is at play within the scheme.

5.       I requested The Federal Treasurer to consult The FCT and to revert to advise how I may give certainty to my clients. Twice now, The Federal Treasurer has written to say that after speaking with The FCT, that my clients can submit PBR  applications on how the tax law applies to their circumstances in relation to my scheme. I think this is a WHOPPING BIG GREEN LIGHT to commence promoting the scheme in this manner and that is what I’m doing (albeit I am currently attempting to swiftly negate your other concerns as discussed yesterday). Consider that as such, every client will be advised to only commit to the scheme if they firstly obtain a favourable PBR using our template PBR applications. In effect therefore, this is not a mass-marketed scheme as everyone’s PBR will turn out a little different here and there because there is no “settled scheme” as the FCT rightly pointed out when denying me a Class Ruling. Furthermore, applying the template to anyone’s circumstances is quick and easy and therefore prodigiously cost-effective. I’d really love to know how to make things any smarter or safer than this for the average Australian resident for tax purposes, who does not have an in-house tax lawyer at their disposal or otherwise within their budget on any basis, as do many high flyers!

6.       Being that we have tried and are still trying to recruit advisers to work with us in promulgating The Procedures to their clients, they should not fear the rules if also seen to be a promoter to their clients or to their business networks.

Kind regards

FRANK GENOVESI DIP FS (FP)

FOUNDING EXECUTIVE DIRECTOR

Not yet having being informed one way or the other, I wrote to The Director again on 18th May 2010 to suggest that should she be duly suspicious of my business as being the promoter of an illegal tax exploitation scheme, that she had in fact had an obligation to act on the matter under point (17) of the ATO internal guideline PSLA 2008/7 however if she felt this wouldn’t be necessary, to put that in writing please.

On 02nd June 2010, I was advised in writing by the ATO that it would be conducting a “formal review”, the purpose of which was to establish any possible risks under the promoter penalty laws (PPL), administered by the Tax Office.

Of note; over the years as well as recently, I’ve written to the ATO on numerous occasions to invite them to visit my business premises (located within my home) and to do all things they consider necessary including inspecting files and documents, taking photos, making audio or video recordings etc, to satisfy themselves of the legitimacy of the operation.

With a bit of luck it will all be over soon and I can then get on with business as usual and get the “monkey off my back” (as the saying goes).

Make It Good Debt!