Ms Nguyen was employed as a ‘beauty technician’ or cosmetologist specialising in nail care throughout the relevant period.
Ms Nguyen said that her pay varied every week to reflect the number of hours she worked. She said she was always paid in cash and she did not recall receiving pay slips. She also said that she did not have any other sources of income because she was too busy working as a beauty technician to do anything else.
Despite not having any time to do anything else because she was working, Ms Nguyen stated that she devoted substantial time to gambling activities, and she enjoyed some success at various casinos, including Crown casino.
Ms Nguyen stated that her gambling was the explanation for the money ‘sloshing’ through her accounts during the periods in question. As the gambling was a past-time rather than a business endeavour, it did not yield assessable income.
The ATO’s views were that deposits into her bank account were from undisclosed income, rather than from gambling wins.
Before the Tribunal, Ms Nguyen was unable to provide sufficient evidence to demonstrate that she had participated in the gambling activities, and won money as claimed. For example, she did not have detailed records of her gambling activities, flight records and documentary evidence about expenses that had been paid on her behalf (by Crown Casino or her employer).
In upholding the commissioner’s assessments (treating the unexplained deposits as income), the Tribunal stated:
“The applicant’s evidence is not persuasive. The objective facts – the churn through the bank accounts, the absence of contemporaneous records beyond the bank accounts, and paucity of corroborating evidence from other witnesses – do not support her account of her income and expenditure. Given aspects of her story are inherently unlikely as I have identified, I do not think the applicant has discharged her burden of establishing that the Commissioner’s assessment was wrong, and that an alternative, more favourable assessment should have been made.”
The Tribunal also confirmed that administrative penalties had been correctly imposed at the rate of 75% for intentional disregard.
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