Tax man’s refusal of tax debt compromise deal

A taxpayer has been unsuccessful before the Federal Circuit Court in seeking review of the Commissioner's decisions to refuse a tax debt compromise and remission of general interest charge (GIC) and penalties.

The taxpayer had taken over his father's jewellery business, but allowed his father to continue to manage its financial administration. However, following various misfortunes including ill health of the father and the global financial crisis, the taxpayer became aware of the mismanagement of the financial affairs of the business. In 2010, the Commissioner commenced debt recovery action against the taxpayer. The taxpayer lodged an application for remission of GIC and penalties and an application for tax debt compromise with the Commissioner. The Commissioner rejected both applications. The taxpayer then sought judicial review.

The Court noted that the taxpayer's applications had been lodged out of time – the compromise issue was out of time by nine days and the GIC issue was out of time by one day. The Court held that the application in relation to the compromise issue was without merit. It agreed with the Commissioner that the compromise decision was not amenable to review under the Administrative Decisions (Judicial Review) Act 1977 as it was not a decision "under an enactment". The Court allowed an extension of time in relation to the GIC issue, but found there was no basis for remission under s 8AAG of the TAA. The Court was of the view that the Commissioner had properly addressed the requirements of ss 8AAG(3), (4), and (5).

Tettis v DCT [2013] FCCA 985, www.austlii.edu.au/au/cases/cth/FCCA/2013/985.html.