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The Administrative Appeals Tribunal has affirmed the Commissioner’s decision not to release a taxpayer, in whole or in part, from his tax liabilities on hardship grounds.

The taxpayer had outstanding income tax liabilities comprised of unpaid tax instalments and general interest charges. Having regard to evidence of the taxpayer’s current income and outgoings, and his family and personal circumstances, the Tribunal found that the assessments were manageable. However, the taxpayer had largely ignored his tax liabilities over the last five or six years, and had allowed the amounts due to accumulate with interest. On his own figures, he had capacity to pay over time.

The Tribunal was not satisfied that the taxpayer’s situation, if required to pay his tax debt, would be one of serious hardship.

Even if there had been serious hardship, the Tribunal would not have exercised the discretion to grant relief. The taxpayer’s situation had been brought about by his own failure to meet his tax obligations. Since entering the PAYG instalment system in 2008 he had paid only 4 of 22 assessments.

The taxpayer had not made any sustained effort to clear arrears and achieve compliance. Since 2009 he had entered into three separate payment arrangements with the ATO. He had defaulted under two of those arrangements and cancelled the third.

Re Power and FCT [2014] AATA 343 (I R Molloy DP, 2 June 2014).

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