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12 Nov 10 ATO's Tax Practitioner Forum

Tax Counsel, Tamera Lang ATIA represented the Taxation Institute at the ATPF meeting last Friday 5 November 2010. The ATO gave a presentation on their firmer action approach to debt collection. The ATO emphasised that they will continue to take into account individual circumstances when determining the best approach to reducing a taxpayer's level of debt. However, firmer action will be taken against taxpayers who choose not to work with the ATO, repeatedly default on arrangements or if the debt is escalating and there is no evidence that the taxpayer will be able to meet their obligations. The "firmer action" can include issuing garnishee notices, bankruptcy/wind-up proceedings and director penalties.  The key message from the ATO was that taxpayers and their advisers should work with the ATO to manage the debt. To assist in this process, the ATO is developing an excel based tool to assess business viability, as well as a fact sheet setting out when firmer action will be taken.

The ATO responded to practitioners' concerns about the withdrawal of TR 95/29 (Div.16 - applicability of averaging provisions to beneficiaries of trust estates carrying on a business of primary production) following the Bamford decision. The ATO stated that they had to withdraw the ruling based on the propositions set out in Bamford. Rather than withdrawing the decision from 30 March 2010 (the date of the High Court judgment), the ATO left the ruling on foot to 30 June 2010 so that taxpayers would only be affected in the 2011 income year. The ATO indicated that they have brought the matter to the attention of Treasury. In this regard, the Taxation Institute has continued to urge the government for trust reform, as this is yet another instance of the impact of the Bamford decision.  

In response to member feedback, the Taxation Institute alerted the ATO to the need for fact sheets addressing the impact of public transactions on shareholders (e.g. takeovers, buy-backs etc). In recent years, the number of fact sheets seems to have declined and this is disappointing for busy practitioners. The ATO undertook to publish a "Key events for Australian shareholders" guide for 2010-11 to make it easier for practitioners to find this valuable information.

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