When imposing financial penalties, the ATO will characterise your culpability level into the three categories of failing to take reasonable care, recklessness and intentional disregard. The Tax Administration Act 1953 prescribes the penalties, which can be up to 75% of the tax owing. In addition, a further 20% uplift is added in certain circumstances – totalling 90%. Finally, interest at high rates are applied and backdated to the relevant time which can often result in more money being owed in penalties and interest than what is owed in tax!
The subjective circumstances of a taxpayer can often be used as a starting point for negotiation with the ATO with a view to reduce or remove any penalties and interest that may have been imposed as a result of an audit, assessment or default. Each case will be assessed on its merits and no two cases should be approached in the same manner. It is not the case that the ATO will reduce penalties and interest simply because they have been asked to. A careful and methodical approach must be adopted to ensure success.
CharterLaw Legal has extensive experience in dealing with remission of penalties and interest by utilising a solid network of high ranking contacts within the ATO to achieve results that can only be obtained by tax professional who understand ATO policies and procedures. Working constructively with the ATO in way that robustly protects your interests can result in potential ATO criminal prosecutions being avoided and to a negotiated settlement with the ATO. Our objective is you pay what is fair but as little as possible.