eCentral Business Show^©

ATO Debts and payment arrangements. Robert King, Xperion Accountants

Tue 10:00am 24 Jul 2018
A hot topic that's circulating around the news and on the Internet pertains to scam calls from "ATO representatives" on "past debts". Whether or not you're aware of any existing taxation debt, there are two things you can do—have them call your accountant, or simply hang-up and personally call your accountant.

Making calls is only the first step the ATO does in its process to keep track of people's taxation debt. If a full payment is not immediately available, the ATO is open for payment arrangements. For this option, there are guidelines that have to be met, and this is the best time to call your accountant as they (of all people) know how to make sense of those guidelines. After a payment arrangement has been agreed to, the ATO will expect to hear from you on the date agreed upon.

The best practice is to keep the ATO posted, even if a payment is not yet possible. The next option the ATO usually does is pass the concern along to a debt collection agency where the possibility for legal action is brought to the table. It's best for things not to head into that direction, so Robert presents another option which is called a Garnishee Notice.

A Garnishee Notice is issued to a third party (your bank, for example) requiring them to pay your money to the ATO to satisfy your debt. This option could be a one-off thing or it could continue until you've paid the debt or when the ATO lifts the notice.

If you've exhausted all your options and there's still isn't enough to pay off the debt, you may need to start looking for loans either from friends or family. When push comes to shove, there's something called the Part 9 Debt Agreement. This agreement is the last option before finally liquidating and declaring bankruptcy. The Part 9 Debt Agreement helps to protect the assets while arranging to meet the payments, negotiating to pay less than the full amount of the debt in a longer period of time.

Finally, when all the other options have been exhausted and your back is still against the wall, it's probably best to liquidate and declare bankruptcy. Robert shares from his clients' experiences that it's not as scary as one might think, but it's a real option nonetheless. Robert has seen the stress being lifted off of people who finally liquidate; it's not the best place to be, but it's certainly a better position than continuing on a path of emotional and financial stress.

Robert's take away from this technical conversation is just to keep the ATO posted and informed about the process. Accountants like Robert handle these situations best. If you're in a tight situation with the ATO, don't hesitate to check out Xperion Accountants via their website - www.xperion.com.au.