You want to ask the ATO for remission of GIC and penalties. But how ?
Remission of GIC and Penalties
Despite all the bad press coverage the ATO gets at times, in our experience they do show compassion and empathy. They understand that life can get in the way. That tax obligations can fall under the table while people deal with the stuff that life throws at them.
And when this happens to your clients, you as their BAS or tax agent can request a remission of GIC or penalties. It is extremely rare that the ATO will remit the actual tax debt, but there is a reasonable chance that you can get a remission of GIC and penalties.
Here are 20 tips we learned over the years about how to ask the ATO and have a fair chance of success.
# 1 Talk to your client and understand the cause of the problem. Look for circumstances outside of their control.
# 2 Only call after all overdue tax returns and BAS statements have been lodged.
# 3 Only call about GIC and penalties when your client is ready to pay the underlying tax debt.
# 4 Have your client’s TFN, your TAN and a document id at hand. The less you let the ATO wait, the more likely they are to listen.
# 5 Know what you want. Make a list of total GIC and penalties you want remitted.
# 6 Know the underlying tax debt outstanding. So you can confirm the total amount of GST, PAYG W or income tax your client will pay today.
# 7 Give this your full attention. Don’t call while you are queuing in the check-out-line or likely to be interrupted.
# 8 Give this all the time it needs. It can take 30 minutes. More if you have to try again. So make sure you are not under time pressure.
# 9 Don’t put the ATO on speaker while you talk or wait.
# 10 Write down the person’s name. It will make you feel more connected.
# 11 Be short and concise. Make it easy for the ATO to get the gist.
# 12 Mention the issue but don’t give the full story until invited to do so.
# 13 Give clear reasons why your client couldn’t pay or lodge earlier. Something that was outside of their control. Like a relationship breakdown, disputes with a business partner, physical or mental health issues etc.
# 14 Be honest. Work in your client’s best interest but don’t lie. It will come back and bite you.
# 15 Stress that the problem has been solved and that your client will be a compliant taxpayer from now on.
# 16 Only promise what your client can deliver. Your reputation is on the line. If you promise and then your client doesn’t pay, it will make it harder to ever get another remission for this client (or other clients).
# 17 Stress that your client can pay today. Cash talks.
# 18 The ATO might tell you to first pay and then ask for a remission. If you do, you might lose your leverage.
# 19 The moment you get the remission, stop talking, be grateful, listen and follow instructions. You did well.
# 20 If you get a No, your client either burned too many bridges and there is nothing you can. Or it is something you said or didn’t say and in that case refect on it and then try again. Or human chemistry just got in the way and so you just call a second time – chances are that you won’t speak to the same person again.
This is what our experience has been. Hopefully it helps you.
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Disclaimer: Tax Talks does not provide financial or tax advice. All information on Tax Talks is of a general nature only and might no longer be up to date or correct. You should seek professional accredited tax and financial advice when considering whether the information is suitable to your or your client’s circumstances.