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  • 3 Findings

    Review Questions

    Case Management

    Based on records available, did the ATO contact, or attempt to contact, the taxpayer with the opportunity to meet their obligations and discuss alternative arrangements prior to commencing formal insolvency proceedings?

    Yes: 80 of 83 cases
    No: 3 of 83 cases

    Of the 3 cases above that were rated as ‘No’, legal warning letters were issued and attempts to contact the taxpayer were made however they were not made within the year prior to the commencement of formal insolvency proceedings.

    Taxpayer Viability

    Based on records available, did the ATO proceed with formal insolvency proceedings despite evidence of the taxpayer being viable and having the capacity to repay the tax debt within a reasonable timeframe on a risk based approach?

    Yes: 0 of 83 cases
    No: 83 of 83 cases

    Observations

    Observations from the 83 cases reviewed are as follows:

    • The ATO made reasonable attempts to contact the taxpayer in 80 of the 83 cases reviewed.
    • Appropriate legal notices were issued to the taxpayer prior to bankruptcy or insolvency proceedings starting in 80 of the 83 cases within the year prior to the issue of a bankruptcy notice or a s459E notice.
    • In three cases the ATO did not appear to have either made reasonable attempts to contact the taxpayer or provide sufficient legal warnings in the year prior to the issue of a bankruptcy notice.
    • In all cases reviewed there was no evidence that the taxpayer was viable prior to the commencement of bankruptcy or insolvency proceedings.
    • 58 of the cases reviewed were individual bankruptcies and the remaining 25 were corporate insolvency cases.
    • Additional recovery actions taken prior to the taxpayer being made insolvent or bankrupt included:
      • Director Penalty Notices were issued in 17 of the 25 Corporate Insolvencies
      • 51 garnishee notices were issued.
       
      Last modified: 30 Aug 2017QC 53196