With over 15 years’ experience in acting for the ATO Charles Bavin knows the ins and outs.
Charles’ top tips when negotiating with the ATO are:
- Get in early.
The ATO is committed to the early resolution of disputes and will explore all means to achieve that end. If a tax debtor takes the initiative to address its taxation debt with the ATO it will find there is a much better outcome than if it ignores its obligations and waits for the ATO to take action.
- Communication is key.
The ATO encourages tax debtors to contact them to discuss options available for resolving a taxation debt. When there is ongoing, open communication between a tax debtor and the ATO there is more likely to be an efficient resolution to a taxation debt.
- Ensure your records are up to date.
Before contacting the ATO in relation to a taxation debt a tax debtor should review their records and ensure everything is up to date, including any outstanding lodgements for the ATO, as well as its own financial records. A payment arrangement is less likely to be considered unless all lodgements are up to date and the ATO will likely want to ensure what is being offered is not only able to be complied with, but also the most that the debtor is able to pay.
4. Be aware of your options.
The ATO is not likely to offer a settlement or payment arrangement to you. All tax debts are payable in full when due. However, the ATO will consider assisting tax debtors in discharging their taxation debts and has the power to consider:
- remitting penalties and other additional charges and interest including GIC in certain circumstances;
- entering into payment arrangements, including secured arrangements;
- deferring time for payment;
- in limited circumstances, releasing payment of certain liabilities; and
- in limited circumstances, accepting a settlement offer.
- Try not to pay other debts at the expense of the ATO
If the ATO sees other creditors are being paid in priority to it then it will be less likely to be lenient to you.
If you would like to know more please look forward to our upcoming webinar series presented by Sarah Cappello, Charles Bavin, Matt Gauci and Lauren Boyd. The three-part series will provide additional practical tips to negotiate with the ATO and further focus on businesses and their directors who may be exposed to insolvent trading, cash flow/debtors and director liability.
Click here to register:
Hunt & Hunt have an experienced insolvency and debtor recovery team who can assist you with your ATO queries.