THE SUPER ACCOUNTANTS
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We provide Taxation, Accounting, Auditing, Business Advisory,Superannuation and Financial Planning Services.
Release from your tax debt
If you are an individual, we can help with your application to have your debt released.
Naturally an individual must be experiencing serious hardship – this is defined by the ATO as not being able to provide accommodation, food, and other necessities for yourself, family, or others for whom you are responsible.
Persons who can apply are individuals, including individuals who owned their own business and are no longer trading, as well as trustees of deceased estates under certain circumstances.
Unfortunately, other business entities such as companies, trusts, partnerships, etc cannot apply to be released.
Furthermore, not all debt can be released – the ATO will only consider releasing debt relating to income tax, PAYGI, FBT and Medicare and the associated penalties and charges.
For a full list of debts that can be released, see PS LA 2011/17 Debt relief, waiver and write off.
How is release assessed?
The ATO will take all aspects of your financial situation into account in assessing your application – thus the income and expenses of your household on a fortnightly basis will be assessed and determined if a payment plan can be set up to help with the payment of the debt.
The ATO will determine whether any assets can be sold to pay off the debt – the ATO will not expect you to sell off assets simply because you have them - assets required to live and work and that are in line with community standards will not be expected to be sold.
Documents supporting the information included in your application should be attached to the application when made.
Once the ATO has determined that the payment of the tax debt would possibly cause serious hardship then they will also look at other factors that may have contributed to your hardship.
Some examples of the types of factors looked at are:
Have you recently sold assets that could have been used to pay the debt?
How much other debt do you have and will the release of the tax debt actually reduce your hardship – this is unlikely if you will not get relief on the other debt.
How permanent is your hardship likely to be and if it is temporary maybe another solution can be found?
Have you been compliant about your tax obligations in the past?
Are you able to pay your future tax obligation? Etc.
Before we can make an application on your behalf:
All required tax returns and activity statements need to have been lodged so that we can determine the full extent of the debt
We will need your up to date contact information so that we can keep in touch during this application
Any unresolved issues with the ATO will need to be resolved first – so if there are any outstanding objections, etc these will need to be resolved
To determine if you are eligible for release the ATO has a tool on their website which you can use.
If we do not believe that we will be successful we will not proceed with the engagement.
If we believe that we will be successful, we are normally happy to charge on a contingency basis.
This means that we will only charge you if the application is successful and we will never charge you more than the reduction in debt.
We will require an upfront payment to cover the initial costs involved in collating all the required information determining a course of action.
This up front payment will only be required once we have agreed to accept the engagement.