As a business owner in Australia, it's important to understand the various tax relief options available to you from the Australian Tax Office (ATO). There are several ways that you can reduce the amount of tax that you owe up-front, through concessions, incentives, and allowances, and most small businesses (and their accountants) will be aware of these.

Are you able to dispute a tax debt?

The first step is to conduct a thorough and expert audit of your business’ finances, and determine whether you’re able to raise a dispute with the ATO. It is critical that you engage with experts like the team at EPAS for this, because mistakes and assumptions can take an already time-consuming and stressful process and exasperate it. There are, however, several avenues with which a genuine tax dispute with the ATO can be raised, including a disagreement over the amount of tax owed, the interpretation of tax laws, or the ATO's decision to disallow certain tax deductions.

If our team and you identify an avenue to raise a dispute, the next steps are as follows:

1)    Gather supporting evidence: If you believe that the ATO has made an error in their assessment, it is important to gather supporting evidence to back up your case. This may include financial records, receipts, invoices, and any other relevant documentation.

2)    Raise the dispute: If you still believe that the ATO's assessment is incorrect, you can raise a dispute by writing to the ATO and explaining why you believe the assessment is incorrect. You should include your supporting evidence with your dispute letter.

3)    Mediation: If the ATO and the taxpayer are unable to resolve the dispute, the ATO may refer the matter to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) for mediation. The ASBFEO is an independent government agency that can assist with resolving disputes between small businesses and government agencies, including the ATO.

4)    Administrative appeals: If the dispute cannot be resolved through mediation, the taxpayer has the right to make an administrative appeal to the Administrative Appeals Tribunal (AAT). The AAT is an independent body that reviews decisions made by government agencies, including the ATO.

5)    Legal action: If the dispute cannot be resolved through administrative appeals, the taxpayer may consider legal action. This is often the last resort and should only be considered after obtaining professional advice.

Where possible, the goal should be to prevent the case going to mediation and beyond. Otherwise, not only does the process become expensive (for the time you need to spend focused on this, rather than your business), but the amount of stress involved in being implicated in legal action with the ATO can be extreme.

This is where the value of having experts in negotiation with the ATO in your corner helps. At EPAS, we understand how the ATO operates and assesses cases, and will be able to help you address your dispute without having to take it further. 

Remember, you can also access tax debt relief

If you have ended up with a tax debt after exploring the options for raising a dispute with the ATO, you still have avenues available to you. The ATO is committed to keeping businesses open and operating, and with the right negotiating support, you will be able to further reduce the tax your business owes – often to cents on the dollar. 

We know it can be scary to get a letter from the ATO, telling you that your business owes a large debt back to it. Rather than panic, however, by talking to us you’ll quickly find that not only is it possible to manage this debt, but by taking a good look at how your business ended up in this position, it will be possible to course correct and put the business in the healthiest position for the future. 

In short, if you need help paying tax debt from the ATO, contact us today.