Question

What action can the ATO (Australian Taxation Office) take if a taxpayer fails to correctly report or pay by the due dates (In Australian Accounting Environment) ? Discuss in 80 to 100 words.

Answer 1

If taxpayer fails to correctly report or don't pay the amounts they owe to ATO on time:

1)They will be charged interest on their unpaid amounts

2)ATO contact them soon after the due date either by

• SMS
• messages in myGov
• letters
• phone

3)ATO use any future refunds or credits to repay the amounts taxpayer owe
4)ATO may refer selected debts to external collection agencies for collection on our behalf
5)ATO may take stronger action if taxpayer are unwilling to work with ATO to address their debt or repeatedly default on agreed payment plans.

Make sure taxpayer lodge tgeir activity statements and tax returns on time, even if they can't pay by the due date. They will avoid a penalty for failing to lodge on time and ATO know taxpayer are aware of their obligations.

The tax laws authorise the ATO to impose administrative penalties if taxpayer fails to correctly report or pay by the due dates.

The purpose of the penalty provisions is to encourage taxpayers to take reasonable care in complying with their tax obligations.

If taxpayer is liable for a penalty ATO will notify the person in writing of the reason for the penalty, the amount and the due date for payment, which will be at least 14 days after the notice is given. The taxpayer is unable to claim a deduction for any penalty paid during the year.

If taxpayer is dissatisfied with a penalty imposed on him or believe there are extenuating circumstances, they can ask for the penalty to be remitted (reduced) in full or in part.