Coordinated Resolution of a $1.6 Million ATO Debt
Snapshot
● Client: Legal partnership (two practising lawyers)● Total ATO debt: $1,600,000● Principal tax debt funded: $1,250,000● Interest and penalties remitted following specialist representation: $350,000● Funding provider: Fundsnational● Project coordination: SBR Assist● Specialist adviser: Independent tax lawyer
Background
The client, a partnership of two practising lawyers, had accumulated an ATO debt of approximately $1.6 million. Around $1.25 million represented the underlying tax liability, with the balance comprising accrued interest and administrative penalties.
The clients required a coordinated solution that addressed both the principal tax debt and the remaining interest and penalty component.
The clients required a coordinated solution that addressed both the principal tax debt and the remaining interest and penalty component.
The Funding
Fundsnational provided funding for the principal tax liability of approximately $1.25 million. This enabled the principal debt to be paid and placed the client in a stronger position to address the remaining components of the liability.
The Specialist Engagement
Following the funding, SBR Assist coordinated the engagement of an independent specialist tax lawyer.
The tax lawyer, acting on behalf of the client, made representations to the ATO seeking remission of the interest and penalty component, based on the client’s individual circumstances and the relevant legislative and administrative framework.
The tax lawyer, acting on behalf of the client, made representations to the ATO seeking remission of the interest and penalty component, based on the client’s individual circumstances and the relevant legislative and administrative framework.
The Outcome
Following those representations, the ATO exercised its discretion to remit approximately $350,000 in interest and penalties.
Overall:
Overall:
● Principal tax debt funded: $1,250,000● Interest and penalties remitted by the ATO: $350,000● Total ATO debt resolved: $1,600,000
Key Takeaway
This matter demonstrates the benefit of a coordinated approach involving funding together with appropriately qualified professional advisers.
Where the principal tax liability has been addressed, taxpayers may be better positioned to seek remission of interest and penalties where the facts support the exercise of the Commissioner’s discretion. Any remission is determined by the ATO on its own merits, having regard to the taxpayer’s individual circumstances and applicable law. Outcomes will vary from case to case.
SBR Assist’s role was limited to project coordination and facilitating communication between the client, the funding provider and the client’s professional advisers. Taxation advice and representations to the ATO were provided by the client’s independent specialist tax lawyer.
Where the principal tax liability has been addressed, taxpayers may be better positioned to seek remission of interest and penalties where the facts support the exercise of the Commissioner’s discretion. Any remission is determined by the ATO on its own merits, having regard to the taxpayer’s individual circumstances and applicable law. Outcomes will vary from case to case.
SBR Assist’s role was limited to project coordination and facilitating communication between the client, the funding provider and the client’s professional advisers. Taxation advice and representations to the ATO were provided by the client’s independent specialist tax lawyer.