The AAT has refused a taxpayer’s application for relief from his income and GST debts.
The taxpayer had outstanding income tax instalments and GST liabilities for a number of years totalling id=”mce_marker”3,256 and in August 2011, he applied to be released from those debts. His application was rejected and he lodged an objection. After supplying the Commissioner with a Statement of Income and Expenses on a fortnightly basis and also a Statement of Assets and Liabilities, the Commissioner reviewed the matter but disallowed the objection not to release him from his outstanding tax debts. The taxpayer sought review from the Tribunal. The issue was whether the taxpayer should be released from his taxation liabilities pursuant to s 340-5 of Sch 1 of the Taxation Administration Act 1953.
- While the Tribunal noted the taxpayer had sufficient equity in his home to pay his tax debts if the Commissioner demanded payment, it considered it “would be a most undesirable path to foreclose on his house”.
- The Tribunal said it was not satisfied the taxpayer was suffering serious hardship.
- However, the AAT said there was “evidence he has treated his tax obligations to the Commissioner with scant regard”.
- In the Tribunal’s view: “Perhaps the most generous assessment is that the organisation of his financial affairs over the past few years has not been optimally structured and granting relief from his tax liabilities would not necessarily result in improving his overall financial position, particularly in relation to his ability to enjoy the necessities of life”.
The Tribunal said it was therefore not satisfied the taxpayer qualified for relief under s 340-5.
(AAT Case [2013] AATA 203, Re Balens and FCT, AAT, Levy SM, AAT Ref: 2012/3031, 8 April 2013.)
[LTN 93, 16/5/13]