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Any tax experts?


IamtheMumma

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IamtheMumma

How far back does the ATO go if you haven't filed a tax return for 7 years?


If tax hasn't been paid at all, is it a debt offered first? Does your property get impounded if you can't pay in a near future timeframe?


Not me, my ex.

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I didn't study tax law at law school, but bloody hell, the default assessment penalty for late lodgement is massive.

Currently, for every $100 that is owed, an extra $75 is also payable.


https://www.ato.gov.au/General/Gen/If-you-don-t-lodge/


I am really surprised he hasn't been audited. He really needs to get on to this. He does not want to litigate as he won't win and courts do not look on this type of behaviour kindly (Including those people that declare their home an independent country and so on). The court may impose a garnishee order (seizing property) to settle his debt at that time.


Has he had any Failure to lodge notices? They incur a strict financial penalty.

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It varies a lot - some people are constantly late, never catch up - never get fined, just carry a debt, pay it down, get teh next one. Never get chased.


Other people get chased after one year late.


To get your house taken they ATO would pretty much have to place you in bankruptcy, they'd be looking at future capacity to earn and so on.


I've never seen a default assessment, but have to say I've generally dealt with good lodgers & payers. One on my books now isn't, but they are just ... I don't know. Avoiding it, but it isn't helping!

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Givingitanothergo

I’m a chronic late lodger and also an accountant. They cut off my CCS and sent me a letter to please lodge. I lodged 5 years worth and was refunded my overpaid fees within five days. I have debt offered a repayment plan that was immediately accepted with no issue. That being said I was always paying tax as it was PAYG. Paying no tax could be different.

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Princess Peach

I didn't study tax law at law school, but bloody hell, the default assessment penalty for late lodgement is massive.

Currently, for every $100 that is owed, an extra $75 is also payable.


https://www.ato.gov.au/General/Gen/If-you-don-t-lodge/


I am really surprised he hasn't been audited. He really needs to get on to this. He does not want to litigate as he won't win and courts do not look on this type of behaviour kindly (Including those people that declare their home an independent country and so on). The court may impose a garnishee order (seizing property) to settle his debt at that time.


Has he had any Failure to lodge notices? They incur a strict financial penalty.

 

$1000 per return for late lodgement.


ATO show outstanding returns back as far as 2000 on the tax agents portal - no idea on how far back their internal records go, because if they accuse you of fraud they can go back as far as they want to with their investigations.

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I once helped someone who was like 10 years behind in tax returns. ATO went out of their way to help. They already had her earnings and tax on their system and basically wrote it down for her to put in her tax returns on my gov as the person did not have these figures.


Each tax return we did gave her a refund and there was only one that had a debt, and she had assumed they would balance the lot out and not give returns if she had a debt. Not sure if they ever chased her up for the debt but there was no late fees. The person also lodged a statement around why the return was not lodged in time. Not sure if ATO have any way to take personal circumstances into account. The person may have not ended up owing anythung anyway due to a tricky situation that had given her a debt elsewhere and the two may have overlapped.


ATO in my experience very much want to help. I think they are out to get the large scale rip offs, not your everyday folk at home earning low or average wages and with stuff going on.

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Spidey_Senses

I once helped someone who was like 10 years behind in tax returns. ATO went out of their way to help. They already had her earnings and tax on their system and basically wrote it down for her to put in her tax returns on my gov as the person did not have these figures.

 

I had a similar experience. I hadnt lodged 3 returns while at Uni and working part time as I mistakenly thought I didnt earn enough. They sent me a letter so I lodged them immediately, and I got some money back. They were quite reasonable and no fines. That was quite a few years ago though. Perhaps they are stricter now?

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Givingitanothergo

Yeah I’ve always found the ATO to be extremely reasonable.. in the past 25 years I only know of one individual that was audited. Even during that process they weren’t aggressive or intimidating.

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I didn't study tax law at law school, but bloody hell, the default assessment penalty for late lodgement is massive.

Currently, for every $100 that is owed, an extra $75 is also payable.


https://www.ato.gov.au/General/Gen/If-you-don-t-lodge/


I am really surprised he hasn't been audited. He really needs to get on to this. He does not want to litigate as he won't win and courts do not look on this type of behaviour kindly (Including those people that declare their home an independent country and so on). The court may impose a garnishee order (seizing property) to settle his debt at that time.


Has he had any Failure to lodge notices? They incur a strict financial penalty.

 

$1000 per return for late lodgement.


ATO show outstanding returns back as far as 2000 on the tax agents portal - no idea on how far back their internal records go, because if they accuse you of fraud they can go back as far as they want to with their investigations.

 

Hello Princess Peach


I spoke to my mum (CPA) about this issue generally this morning. The ATO is very unlikely to go back to 2000 due to the low cost benefit. It's a time consuming and expensive exercise (staff), particularly if the individual who hasn't lodged works on contract, is employed periodically or moves roles a lot.


Can your ex-partner see a financial counsellor? He cannot avoid this forever, and the ATO does take mitigating circumstances (including mental health) into consideration. If the amount needing to be paid can be worked out, then a payment plan can be developed and it will all get sorted out.


I hope he gets help.

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ABabyPlease

He hasn't filed because he doesn't want to pay tax. He reckons he pays enough tax with cigarettes, alcohol and fuel.

 

That gave me a real laugh! I can see why he's an ex.


How many cigarettes do I need to smoke to pay for my healthcare?

How much alcohol does it take to educate my kids, pay for a defence force, infrastructure etc..

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nom_de_plume

When DP and I got together, he hadn't done a tax return for 9 years and they had only recently started sending him letters threatening to suspend his ABN, or impose penalties if he didn't complete them etc. I helped him do them and overall he ended up with a decent refund. He wasn't charged any penalties or fees.


As for debt payment, they are pretty lenient. If you call and ask for a payment plan (even if it's only $5 per week) they'll generally say yes. It's not like dealing with Centrelink or Child Support.

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The consequences will be different for different circumstances. Many people will be due a refund or only have a very small amount of tax to pay. I had a year where I had to pay an extra $20 so the country is hardly going to go broke if that return was late (it wasn’t but there was no incentive to lodge early).


But for those with businesses, their ABN could be cancelled if they are behind in their returns because it will look like it is inactive. For those with families, there are consequences for Family Tax and child care payments, Those with really big debts where there is no progress towards paying them off can get stopped from leaving the country. Not a big issue at the moment but a big motivator for international fly in/ fly out workers.


Some professionals have been struck off for not complying with their tax obligations. Barristers is a big one. For those in the public eye, a court appearance would be embarrassing unless you are Paul Hogan. Getting a mortgage at the standard rate would be hard if behind on your taxes.

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IamtheMumma

Thanks all. I guess I'll wait and see what happens. I expect I'll be complaining that I will have a FTB debt from when we were together 5yrs ago. I think he has around 7 or 8 years of tax returns to do.

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