Over the years we’ve had a lot of wins for clients with outstanding tax debts, by having ATO interest and penalties waived. In many cases, the amounts have been significant.
A great example is a recent case where we had $85,000 waived for a client. They were obviously very happy.
This was a great result considering a large part related to a 2013 tax debt and the client was not a model citizen when it came to their lodgement history.
Now the ATO won’t just give this sort of money away, but if you follow our 5 steps below you’ll greatly improve your chances.
- Get on the front foot and enter into a payment arrangement if you fall behind.
- Make sure your lodgements (tax returns and BAS’) are up to date for the entity seeking the remission before applying to have the penalties waived.
- Pay out the primary tax debt (excluding interest and penalties) before applying.
- In your request, be armed with some good reasons why the late payment/lodgement was beyond your control.
- Advise the ATO that having to pay the penalties would cause financial hardship if that is the case.
In our experience, the ATO is most concerned with collecting the primary tax debt. If you get a reasonable officer at the other end they will generally remit the penalties on that basis.
So good luck with making your requests!