GIC remission decision highlights a failed framework, ABRT chairman says

The framework aimed to help vulnerable people, such as the 97-year-old taxpayer, when they interact with tax and super systems. 

“A key consideration to ensuring there are consequences for deliberate non-compliance and misuse of the system includes taking into account where people seek to take advantage of people experiencing vulnerability, including financial abuse and coercion,” the ATO said on its website.

Griffith said: “A decision letter that records every fact favouring remission and still refuses – without connecting evidence to conclusion – is not genuine discretion.” 

“It places additional burden on practitioners and puts vulnerable taxpayers at greater risk of an outcome the ATO’s own framework was designed to prevent.”

In late January, the ATO released case studies detailing common situations that would warrant a general interest charge (GIC) remission, following criticism about its handling of taxpayer relief decisions.

This led to a GIC remission review on 2 March by the Tax Ombudsman, which found that 92 per cent of remission requests made over the phone were approved, compared to 76 per cent of written requests.

“For tax practitioners, dealing with vulnerable clients carries significant time cost risk …. the phone channel means unbillable time on hold with an outcome that depends entirely on who answers,” Griffith said.

“The review concluded that the ATO’s approach to GIC remissions was not meeting community expectations and led to unduly harsh outcomes for taxpayers trying to do the right thing. Issues including inconsistency, poor communication and a lack of transparency were widespread,” Accountants Daily previously reported.