Personal Tax Debts

Are you unable to pay your personal tax debts?

You may have personal tax debts for income tax, administrative penalties and interest. Our specialist tax lawyers can assist you with different options including:

  1. negotiating a payment plan with the ATO. Generally the ATO want the tax debt repaid within a period of 1-2 years;
  2. lodging an objection with the ATO about the amount of the tax debt;
  3. lodging a remission application with the ATO for the remission of administrative penalties and interest;
  4. obtaining a release from a tax debt which have been wrongly assessed by the ATO; and
  5. obtaining a release from a tax debt if you are suffering serious hardship.

Will the ATO release me from some or all of my tax debts?

The ATO has a discretion to release a person from some or all of their tax debts. Serious hardship may arise if you (for example) would be left unable to provide food, accommodation, clothing, medical treatment, education and other necessities for yourself and your family. You can apply for a release from income tax, penalties and interest charges associated with an outstanding tax debt.

What happens if my application for release if refused?

If your application for release from your tax debts is refused, there are further options available for you to successfully obtain release from your tax debts. Our specialist tax lawyers are highly experienced in:

  1. preparing objections against an ATO decision; and
  2. appealing an ATO decision to the Small Taxation Claims Tribunal (no application fee) who determine whether relief should be granted.

Can I reapply if my application is refused?

Yes, especially if your circumstances have changed. The ATO will consider your further application for a release from your tax debts based on your new circumstances.

Company Tax Debts

Options for resolving corporate tax debts

You may receive an assessment from the ATO for the GST, income tax, or administrative penalties with an amount of general interest charge applied to the amount of the tax debt. If your company has received an assessment or an amended assessment and not paid the tax debt, the ATO may take debt recovery steps against you.

There are 5 main strategies for resolving corporate tax debts:

  1. Lodge an objection to a tax assessment you have received;
  2. Enter into a payment arrangement with the ATO;
  3. Apply for a deferment of the payment of your tax obligations;
  4. Offer the ATO security for the payment of the tax debt; and
  5. Appoint an administrator or liquidator.

Lodge an objection to an assessment

If you dispute the amount of the tax debt, you can lodge an objection to an assessment for GST or income tax which has been issued to the company. You may also be able to reduce any administrative penalties and have some or all of the general interest charge remitted. It is necessary to set out all of the relevant facts and the law when lodging an objection to an assessment, so you may need to obtain advice about the objection before it is lodged. If the Commissioner disallows your objection in whole or in part, the company may appeal the decision of the ATO to the Administrative Appeals Tribunal or to the Federal Court.

Enter into a payment arrangement

Depending upon your company's specific circumstances, the ATO may agree to a payment arrangement to pay off the tax debt over a period of time. Care should be exercised before providing information to the ATO for a payment arrangement because you may simply be providing the ATO with evidence which supports the winding up of your company.

Apply for a deferment of the payment of your tax obligations

If your business is experiencing serious hardship, you may wish to apply for a deferment of the time for payment of a tax debt to give you additional time to pay and to stop the general interest charge from accruing.

Offer the ATO security for the payment of the tax debt

The ATO may in certain circumstances agree to being granted security for the payment of a tax debt. Such security may include a mortgage over land or a bank guarantee.

Appoint an administrator or liquidator

The directors of a company may consider it necessary to appoint an administrator or liquidator, depending on the specific circumstances.

Deceased Estates

Can a trustee of a deceased estate apply for a release?

Yes. The ATO may release the trustee of a deceased estate where the dependants of the deceased individual would suffer serious hardship if the trustee paid the liability.

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