Received a penalty from the Australian Tax Office for a failure to lodge your tax?

You are not alone with the Australian Taxation Office (“ATO”) being on a significant collection drive by sending these types of notices for overdue income tax, GST, activity statements, and other lodgements.

The ATO calculates the dollar value of the penalties by imposing penalty units under the Taxation Administration Act 1953. We have seen penalties as high as $870 per return. While it is rare that one of our clients will ever receive one of these notices, we commonly find that prospective clients come to us because they have recently received one of these penalties and they are seeking our help to remove the penalty.

What can you do to reduce/remove the penalties?

While it’s not rocket science, there are a number of steps that we take with our clients to assist our clients in completely removing these penalties.  Here is how we can help:

  1. Talk with our clients to understand why the returns weren’t lodged on time.
  2. Set a timeline with the client as to when we can prepare and lodge the return.
  3. Contact the ATO to request an extension to the client’s timeline.
  4. Efficiently work to prepare the overdue return.
  5. Contact the ATO and explain the client’s individual circumstances, advise them that the overdue return has now been lodged, and request a full refund.

Commonly, the ATO will remit the penalties in full where the client’s circumstances are valid. Where the ATO continues to be reluctant we continue to work with our clients & potentially pursue legal opportunities.

If you have recently received a penalty letter from the ATO, please do not delay in contacting us as we have had significant success in removing these penalties on behalf of our clients.