Nth QLD RTPWG minutes, July 2011

4. ATO approach to debt collection

Paul Kruspe - Assistant Commissioner, Debt, Risk Intelligence & Reporting, provided an overview of the ATO's current approach to debt collection, including information on strategies and processes related to garnishees, insolvency and various penalties.

Important points included:

• Micro businesses account for approx 2/3rd of collectible debt.
• We have a balanced approach to differentiate clients; we aim to assist those working with us and be firm but fair with those that choose not to work with us or who don't have the capacity to pay.
• We want to engage taxpayers early when they experience debt issues, to try and obtain payment in full or make a sustainable payment arrangement.
• We have flexibility in our payment arrangements and try to align these with the business cash flow, and where appropriate we will remit interest charges.
• We have found it is more effective to address the debt early, and key elements are early intervention and then ongoing engagement, however we will take timely further action if people are not working with us to clear the debt.
• Taxpayers will always be notified before we take firmer action.
• Further action may include garnishee and director penalty notices.
• Insolvency action is very limited, and only pursued where all other options have been exhausted.

Paul also discussed our approach to those taxpayers that are affected as a result of natural disasters, including:

• Our immediate approach to identify the postcodes/localities and in the immediate hours/days quarantine that area to prevent letters/contact if the scale of the disaster warrants it.
• Stop debt collection calls for a period of time, so that people can concentrate on reconstruction or other priorities.
• Depending on the natural disaster that area might be quarantined for a short period or quite a long period.

In the longer term, once quarantines are lifted we may start contacting taxpayers in these areas and our staff are attuned to asking appropriate questions re the status of their business. We take into account the persons situation and understand what their situation is regarding cash flow and what it may be over the coming months or years. It is important taxpayers inform us of their whole situation.

Sections within Agenda items

• 1. Welcome and introductions
• 2. Minutes and action items of the previous meeting
• 3. Pre-filling update
• 4. ATO approach to debt collection
• 5. Proof of identity procedures
• 6. ATO Tax Practitioner Forum agenda items
• 7. Other business