Opinion: Bad behaviour by the ATO

by AB29 Dec 2014

We are here to support and work with you to meet your tax obligations.  We understand your circumstances may be difficult and we will consider another payment plan offer.  You can:

• Increase your offer
• Make a significant upfront payment and offer the balance by instalments.

One wonders if the ATO even read the information provided as if they had it would have been clear that Mary was simply unable to offer more at this stage.

Being very disappointed with this response I contacted the ATO to discuss the matter.  I was told that unless Mary could increase her payments or pay a lump sum towards the debt they would obtain judgment and move to bankruptcy.  I couldn’t believe what I was hearing and spent the next twenty minutes pointing out that Mary had little in the way of assets and wanted to honour the debt however this seemed to make no difference.  

It would appear the sentence in their letter that stated “We are here to support and work with you to meet your tax obligations” is merely rhetoric.  It would seem the ATO would prefer to bankrupt a member of the community rather than help.  How can this possibility be in anyone’s interests including their own?  This attitude defies commence sense.

I note that when Mr Joe Hockey was appointed Treasurer he commented how he was going to look at the ATO and make sure they adopted a more human approach to people in financial hardship.  While I acknowledge change comes slowly with government bodies it would appear there has been little progress in this area.

I’m confident Mary’s story is far from an isolated event and this belligerent attitude has been displayed by the ATO many times before.  Such an unwillingness to help people like Mary who are suffering genuine financial hardship is a misguidance of power, uncommercial and quite frankly unnecessary.

The ATO needs to understand that are people at the end of these decisions and moving to bankruptcy when there are better options available has the potential to ruin lives, destroy families and place even more burden on an already strained social welfare system.

This story is not designed as a “beat up” on the ATO but does go to highlight what appears to be a systemic issue that needs to be addressed. 

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  • by Roman 29/12/2014 9:56:45 AM

    Under income act assesment act 1997
    Defenition of an individual is : includes a natural person
    The defenition of a person is : person" includes a company.

    It does not say anywhere that a living breathing man should pay income tax.

    Also this act fails to define the word " income"

    The legal defenition of income is profit and not wages and salaries, go amd ask the ato what is the defenition of income, every time they give a different answer.

  • by sadler.. 29/12/2014 10:09:33 AM

    I wish to keep my name anonymous thus using a fake name.

    I owed ATO mere $9000 due to slowdown in a business investment resulting in financial hardship. At the time, I could at the most afford to pay $300 per month and needed time before I can work towards making more money and be able to pay more monthly payments. I called and discussed the matter with ATO.

    Besides Mary, I am another person getting the similar response. I was told they can accept a minimum upfront of $1000 and a minimum monthly payment of $450, which must pay off the debt within 18 months. Anything less than those amounts were unacceptable and the next step explained was to put me to recovery company and bankruptcy if I still dont pay up.

    I was contacted by the recovery company with whom I set up the repayment of $250 per month. They gave me initial 3 month probationary repayment period, which meant that if my circumstances change and I can pay more after that, I can change the monthly payable amounts. All this with no interest being added to the amount owed while they payments are going to the recovery company.

    In summary, having experienced the similar treatment from ATO, I also wish to vote for ATO to mend its ways to help people going through hardships and give them a reasonable chance to pay their debt instead of pushing towards the tough choice of declaring oneself insolvent.

  • by JR 29/12/2014 11:32:32 AM

    A very good article John - I have a few clients in the same position. Let's hope the ATO adopts a better approach to payment plans soon.