The ATO has an underlying expectation that taxpayers will pay their tax debts as and when they fall due. The ATO does not consider itself to be a credit provider and expects that tax debts be given the same priority as all other debts.
The ATO will take whatever action is necessary to recover the debt, including but not limited to the following:
- Garnishing bank accounts
- Garnishing salaries
One of the most effective ways to ensure that the ATO does not utilise the above enforcement procedures is to strategically negotiate an effective and viable payment arrangement.
There are various factors which need to be carefully considered and balanced. For instance, it is important to ensure that the debt has first been reduced by remission applications. This makes the arrangement more manageable and opens the door for further remission requests.
Moreover, in some cases, it may be possible to compromise the debt as an alternative form of payment arrangement. This allows you to pay a lump sum amount less than the primary tax owing.
Any successful payment proposal requires the taxpayer to demonstrate to the Commissioner that they are no longer a risk to the revenue and have made genuine attempts at compliance. That is why it is important to come forward voluntarily to arrange a payment plan before the ATO starts the debt collection process. This principle applies regardless of the amount of the tax debt involved.
If you have an outstanding tax debt and do not want to be the victim of harsh ATO enforcement action you must seek professional assistance immediately. Please contact our team of lawyers at The Quinn Group on (02) 9223 9166 or submit an online enquiry form today.