ATO debt recovery powers – Pay now, fight later

The Australian Taxation Office (ATO) might identify any additional tax liabilities owed by you or your entities following a review or audit of you or your entities' tax affairs. In that case, the ATO is likely to issue you with an amended assessment or an assessment imposing certain administrative penalties. In respect of these assessments, the ATO generally adopts a 'pay now, fight later approach'. That is, notwithstanding any objections, that ATO may impose additional liabilities on you or your entities. Further, you will still be required to pay them within the timeframe set out in the respective assessments. The rationale behind this is that if you are successful at objecting to any of your tax liabilities, the ATO may simply refund such monies back to you with interest. This article will explain the ATO's debt recovery powers and how you can challenge the process.