Answer to Question #298938 in Accounting for Hettiarachchige Nadishani

Question

Question 6 (13 marks)  As the result of an audit, IMF Productions Ltd received an amended assessment on 1 June 2022 for the year ended 30 June 2021. It amended an earlier assessment, which was dated 11 December 2021, by disallowing $110,000 claim for work related travel expenses. The travel expenses were incurred in establishing an office in China. IMF Productions Ltd already has a number of offshore offices in the Asia-pacific region. Required: (a) Advise IMF Productions Ltd about objecting to the amended assessment citing relevant legislation to support your answer.                                                                  (6 marks) (b) Assuming that, on the 1 October 2022, IMF Productions Ltd received notice that their objection had been disallowed, what further options are available to them? What are some of the factors that should be considered? Cite relevant legislation to support your answer.  

Answer 1

Advice to the IMF Productions Ltd

a)    Time of Service

The claimant, IMF Productions Ltd, has the right to appeal for hearing within thirty days from the day the notice of disallowance was given. The director will then convene a hearing and if the hearing concludes that the disallowance was incorrect, the director has to set aside the disallowance. The claimant as well as the board of supervisors will therefore be notified by the director on the outcome of the hearing.

The claimant will then get judicial review of the action which will be addressed to the director for reimbursement. This is according to Chapter 17A

b)    Manner of Service

The objection of the claimant from the officers or agencies in the United States should be done in the manner provided for service of summons and complaint in accordance with rule 7004(b) or (5).

IMF Productions Ltd should be insured depository institution according to Section 3 of the Federal Deposit Act, as provided in Rule 7004(h)

c)    A case of disallowed objection, the penalty applies on property. All other taxes and collections shall be returned to the department of revenue.