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  • 3 Findings

    Review questions

    Case management

    Did the ATO have a reasonable basis to believe the taxpayer would be aware we may commence formal insolvency proceedings?

    Explanatory note: IPS made an evaluation based on whether it was likely that the taxpayer would be aware that the ATO may commence legal action prior to serving a bankruptcy notice or issuing a s459E notice?

    Yes: 96 of 96 cases

    No: 0 of 96 cases

    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?

    Explanatory note: IPS made an evaluation based on the evidence in the case notes that may have suggested that the taxpayer was viable?)

    Yes: 0 of 96 cases

    No: 96 of 96 cases

    Observations

    Observations from the 96 cases reviewed are as follows:

    • The ATO made attempts to contact the taxpayer in all 96 cases reviewed.
    • Appropriate legal notices were issued to the taxpayer prior to the initiation of insolvency proceedings in all cases such that the taxpayer would have been aware of the debt and that the ATO could take legal action at any time.
    • In all cases reviewed there was no evidence that the taxpayer was viable prior to the commencement of insolvency proceedings.
    • 40 of the cases reviewed were individual bankruptcies and the remaining 56 were corporate liquidation cases.
      Last modified: 20 Aug 2019QC 59948