Two taxpayers (Caratti & Bazzo) have failed to convince the Federal Court that it should make orders preventing the Commissioner taking recovery action while their challenge to the tax assessments remained on foot.

The taxpayers argued that the ATO was bound by the terms of a deed agreed by the parties under which the ATO would forbear from taking enforcement action if the taxpayers provided security in the form of mortgages over specified property within 30 days.

The Court agreed with the ATO that it was free to pursue enforcement action because the taxpayers had not provided the security within the period required and that it was now too late to do so.

(Caratti v CofT [2018] FCA 1691, Federal Court, Colvin J, 9 November 2018.)

FJM 28.11.18

[LTN 218, 12/11/18; Tax Month – November 2018]


CPD questions (answers available)

  1. Did the taxpayers seek orders restraining the Commissioner taking recovery action?
  2. Did they do so, on the basis of a deed, where the Commissioner promised to refrain from recovery action, if mortgage security was given within a particular time?
  3. Was that security given as agreed?
  4. Did the Taxpayers get the orders they sought?

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