The AAT has found a taxpayer was in “serious hardship”, but refused to exercise the Commissioner’s discretion to release him from his tax debts under Div 340 of Sch 1 to the TAA.
- The taxpayer had requested that the Commissioner release him from his tax liabilities amounting to around id=”mce_marker”03,000 for the period roughly 2008 to 2012.
- As at the date of the hearing, the Commissioner submitted the total of the taxpayer’s debt was id=”mce_marker”29,806.37, comprising $52,458.49 and $77,347.88 of eligible and ineligible liabilities, respectively.
- The taxpayer did not dispute the amounts and the categorisations, and accepted that only the eligible liabilities may be the subject of release.
- The Tribunal heard the taxpayer had suffered, among other things, a marriage breakdown, associated health problems, and an arm injury, which made physical work difficult.
After applying the relevant tests contained in Practice Statement PS LA 2011/17, the Tribunal was of the view the taxpayer was in serious hardship as that term was used in s 340-1 of Sch 1 to the TAA.
However, it refused to apply the discretion to release the debt.
- Among other things, it was of the view the release would not result in the reduction of the taxpayer’s hardship.
- It also noted the taxpayer had prioritised the payment of other debts ahead of the debt he owed to the ATO.
Accordingly, the Commissioner’s decision was affirmed.
(AAT Case  AATA 190, Re Hulsen and FCT, AAT, Ref No: 2013/4914, Kenny SM, 4 April 2014.)
[LTN 67, 8/4/14]