How to Reduce Your ATO Tax Debt

 

ATO tax debt relief has many different faces. Each method of reprieve comes varies based on certain variables such as amount owed, current financial situation and fines as a result of the tax debt. In addition ATO tax debt relief programs are available for all different types of debts regardless of if they are income, property, employment or business related liabilities.

Here are some ways to reduce your ATO debt.

• Negotiated settlements. This is often the best solution as it can not only remove the penalties you may have been assessed, but it can actually reduce the tax liability. It could be that the taxes are questionable as to their nature or that the person responsible will never be able to pay off the fees or for other extraordinary circumstances.

• Deferment of Time for Payment. This is an agreement and in ATO jargon is called a monthly payment arrangement. Essentially, you agree to pay the ATO tax debt (including interest and penalties) by installments. Payment extensions are typically short term, but if your circumstances are extenuating they may grant long term extensions in hopes that your financial situation might improve.

• Remove interest and penalties. This is a request to the ATO to remit interest and penalties in part or full. Reassessment or a waiver can be requested if you can demonstrate that you cannot pay the full ATO tax debt due to circumstances you are powerless to affect or extenuating circumstances such as death or other traumatic situation. Documentation of the situation would need to be provided as part of this request.

• Release from Payment. This is an application for release of ATO tax debt in whole or in part. The ATO has the sole authority for determining applications. An application for release may be granted where payment of the liability would entail serious hardship. According to ATO policy, serious hardship would exit where a person is left without the means to achieve basic living requirements.

Much of the tax debt in this country is not due to negligence or lack deliberate refusal to pay, but is instead the result of misunderstanding. Like many Australians, you might be facing ATO tax debt and wondering how you will ever emerge from it.

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