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 [2014] AATA 190, Re Hulsen and FCT, AAT, Ref No: 2013/4914, Kenny SM, 4 April 2014.)

[LTN 67, 8/4/14]