Tax penalty remissions
The Australian Taxation Office distributes penalties to ensure individuals are not making misleading or false statements regarding income, business and wealth matters.
Studies indicate there is over $5.5 billion lost every year through tax avoidance in Australia, a massive amount of money. One of the reasons these penalties exist is to ensure taxpayers take more care and responsibility in adhering to their tax responsibilities.
While the ATO has the power to distribute penalties, they also have the discretion to reduce or modify the penalties individuals owe. If you find yourself in a position where you are owing money due to penalties such as failing to lodge in due time, PAYG withholding, etc., there are a number of actions you can take. You can make a request to remit or cancel your penalty either online, by phone or by mail.
In your request to remit or cancel a taxation penalty, you will need to provide the following:
- Full name
- Name, address and contact number to contact you (or an individual on behalf of you) regarding your request
- Tax file number/Australian business number
- Reference number (you will be advised of when you receive your penalty notice)
- Reason/s as to why penalty should be reduced or cancelled
- Details of penalty amounts and dates.
The ATO will review your request and notify you of its final decision. Factors that will be considered include:
- Previous compliance history
- Deferred or avoided tax
- Reasons that brought about the penalty
- Whether the ATO became aware of your non-compliance through internal investigations or through voluntary disclosure.
- Your overall attitude towards resolving the issue.