The AAT has affirmed the Commissioner’s decision refusing to release a taxpayer from his tax liability under s 340-5(3) of the TAA.
The Tribunal heard that essentially due to the taxpayer’s wife’s illness, he had been increasingly required to care for her as well as their 2 teenage children, and that this combined with a lack of work in income producing activities meant there had been a significant reduction in his income. The Tribunal noted the couple continued to receive rent and lease payments from a former home, which was rented out and a taxi licence that was leased to another[ person]. The total amount of tax owing amounted to some $30,500.
The Tribunal was satisfied the taxpayer was facing serious hardship in the immediate future in the sense of him being without means to purchase food, clothing and medical supplies for his wife and children, or to continue to provide accommodation, education for his children and other basic requirements that are reasonable by reference to general community standards. Even if he and his wife were to sell their former home and the taxi licence, the Tribunal said the taxpayer would likely to continue to face serious hardship. However, it said this was not serious hardship that would arise from him being required to satisfy his tax liability – which meant the taxpayer had not met the requirement in Item 1 of s 340-5(3) of the TAA for the discretion to release him from his tax debt in whole or in part.
(AAT Case [2013] AATA 746, Re Rasmussen and FCT, AAT, Ref No: 2012/4154, Forgie DP, 17 October 2013.)
[LTN 202, 18/10/13]