If your tax debt includes tax penalties and/or general interest charge (GIC) you can apply for a reduction or elimination of the tax penalty and/or GIC.

What types of tax penalties can be reduced?

The ATO issues tax penalties for several reasons, for example when a taxpayer has:

• made a false or misleading statement;
• taken a position that is not reasonably arguable;
• entered into a tax avoidance scheme;
• failed to lodge documents on time.

What factors will the ATO consider in reducing your tax penalties or GIC (general interest charge)?

• your compliance history;
• whether tax was deferred or avoided;
• the reasons for the increased tax that brought about the imposition of penalties;
• whether the ATO became aware of the tax shortfall as a result of your voluntary disclosure or because of compliance efforts;
• your attitude towards complying with the tax laws.

In what circumstances does the ATO remit GIC?

A partial or full remission of GIC may be available in one of the following circumstances.

1. You delayed paying your tax debt but it was not your fault.
2. You had a fair and reasonable reason for delaying payment of your tax debt.
3. You had special circumstances affecting your case.  For example, you have a good history of paying on-time, but you were unable pay GIC on a one-off occasion.
4. The ATO considers it ‘otherwise’ appropriate to remit your GIC.

How to reduce or eliminate your tax penalties and/or GIC?

Applying for a remission of interest is complicated.  You will need the assistance of experienced tax experts such as Waterhouse Lawyers.  We are a dedicated team of tax professionals, comprised of lawyers and accountants, including a former Director of the ATO, and a former Deputy Commissioner of Taxation.

We have over 75 years of combined tax experience taking care of complex matters.  Our decades of experience enables us to help our clients effectively and efficiently, which saves you money on professional fees.  To find out how we can help with your tax debt and tax penalties, contact us now.