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  • Background and approach

    The Commissioner is able to grant release from payment if it is established payment of certain tax liabilities will cause serious hardship. The term ‘serious hardship’ is not defined by legislation however the Judiciary has provided descriptions and interpretation of that term in various matters heard before them.

    The ATO recognises there may be circumstances that prevent appropriate taxing being paid on time. In these circumstances, the ATO will allow payments to be made by instalments over time. If taxpayers and businesses are unable to pay their taxes, the ATO is able to release taxpayers from the tax debts or take further recovery action.

    The purpose of the review is to provide an internal assessment of whether the ATO has followed its procedures, policies and guidelines and kept the taxpayer informed of the status of their application when making decisions about the release of debt.


    A sample of 270 release decisions made during 2016 were selected and extracted by the ATO from its debt management files. Several additional files were also selected by the ATO to be used if a conflict of interest was identified.

    Review process and methodology

    Reviews were:

    • undertaken at the ATO’s premises at Francis St, Northbridge, Perth, WA during 2016
    • based on electronic case files – each case was made up of
      • relevant notes
      • communication and correspondence between the taxpayer and ATO
      • taxpayer release application forms
      • ATO application assessment worksheets and statements of taxpayer running debt balances.

    The approach to each review was as follows:

    • review all client/staff notes and documentation on ATO systems and some external systems to gain an understanding of the case
    • determine the client’s circumstances and assess the information available to inform key decisions throughout the management of the case
    • determine the appropriateness of staff actions against the outcomes based Service Delivery Quality Framework
    • complete an assessment on each client for the decision made, reporting on any observations and findings to the relevant parties.
      Last modified: 12 Oct 2017QC 53506