• Frank was an owner of a well-known bank branch and after completing a 5-year lease, the bank were advising branch owners that they would not be renewing their leases and would retain the trail.
• Without the trail Frank was left with a large tax debt.
• He pursued the bank through the courts.
• Frank fell into a deep depression and was no longer able to work.

The debt was written off in 2015 due to being deemed uneconomical to pursue by the ATO.

Debts can be written off for various reasons such as:

• Unsuccessful contact made with taxpayer
• Taxpayer is unemployed or on the pension with no forseeable future of income

Tax debts written off as “uneconomical to pursue” may be re-raised by the ATO if the ATO believe the tax debt can be recovered. 

Situation

In 2018 and 2019, Frank was working and lodged an Income Tax Return that returned a credit to the taxpayer. The ATO pursued Frank for the payment of the tax debt and subsequently the ATO approved a payment arrangement offered by Frank. He entered a payment arrangement that he was meeting comfortably.

Next came the global pandemic which threw his life into a spin and he could no longer meet his payment arrangement.

His accountant suggested that he pay $150,000 in primary debt and the accountant would see to it that the ATO remitted the remaining GIC of $50,000. His accountant suggested that he sell his house and pay the $150,000 in primary debt. 

The client put his house on the market and bought a smaller house in a more affordable area and notified the accountant once the $150,000 was paid. Unfortunately, the accountant did not receive the outcome that was expected and had to notify their client that the ATO refused the application.

Frank was devastated because they felt assured by the accountant that the interest would be remitted. After this experience the taxpayer moved to another accountant who reached out to us at TDSA.

Success

• TDSA met with Frank to uncover all the circumstances of the past which led him into tax debt.
• We prepared a well written and evidence supported remission application which was subsequently approved by the ATO and the tax debt was remitted, leaving Frank with no tax debt.