Just got a call about a Tax Debt

frostman on 02/03/2016 - 10:26

Hello,

Just received a call from a receptionist at my local Accountant office that I owe a tax debt of (e.g) $1,000 from 2014.

I have a few questions:

A.) Can the ATO refer the debt to my Tax Accountant as they did or do they contact you direct?

B.) I have 1 income from my work, however the other 2 sources of income are:

1.) Some Shares/Dividends
2.) I have a small amount of money in a managed fund account which get paid every 6 months
3.) <NO Interest earnt>

My question is, given ive supplied by TFN for incomes 1.) and 2.) isnt that received by the ATO automatically and calculated as part of my gross earnings?

Financial

Comments

  • altomic on 02/03/2016 - 10:31
    +2

    A) The ATO contact your tax agent as they did your tax. The debt is still with the ATO. Call the ATO and enter a payment plan.

    B) no idea.

  • retiredfeline on 02/03/2016 - 10:31
    +1

    My question is, given ive supplied by TFN for incomes 1.) and 2.) isnt that received by the ATO automatically and calculated as part of my gross earnings?

    No, supplying the TFN just means you don't get tax withheld at the top rate. It's still your responsibility to declare that income even if they can find it out. Share dividends are usually fully franked (tax already paid) so the adjustment to your actual tax rate will usually be small.

    • ESEMCE on 02/03/2016 - 10:43
      +1

      Not "usually" fully franked at all.
      Many are, but many are only partially franked.
      I'd say it's pretty close to 50:50 whether they're fully franked or not…

  • Baysew on 02/03/2016 - 10:31
    +1

    A. You would have appointed your Tax Accountant as your representative.

    B. Contact your Tax Accountant.

  • 2jzzzz on 02/03/2016 - 11:32
    +2

    You sure it isn't a scam?

    • frostman on 02/03/2016 - 11:34

      I actually hope it is as it means I dont have to pay anything =(

  • kiamsup on 02/03/2016 - 11:41
    +1

    It is scam. Contact the ATO and deal with it directly. The ATO is very helpful and one of the nicest government agency. Be honest with all your information because they have almost all your private information and governed by the privacy law, which means they don't share it with the private businesses. Dishonesty to the ATO will lead to fines. However, if you are not sure of the tax implication and don't understand what the ATO is saying, refer your case to an honest accountant. Good luck.

    • mattyman on 03/03/2016 - 13:01
      +1

      Why the downvotes on this?

  • justhooked on 02/03/2016 - 11:45
    +2

    Been lots of these scams reported , only deal direct with ATO . Make sure you use the ATO phone number from there web site as some give you false numbers via phone and on emails that link back to the scammers.

    Please report back after you call the ATO so we all know …thanks

  • pointless martyr on 02/03/2016 - 12:00
    +1

    SCAM. ATO will write, not call asking for your details

    And FYI that nice Indian fella named John from Mellaborne or Siddonee calling about your malware infested PC is not actually from Microsoft either

    • frostman on 02/03/2016 - 12:18
      +1

      lol yeah,i've had calls from Lisa in Melbourne that apparently I was involved in a Car Accident and she needs my license details hhaha

    • [Deactivated] on 02/03/2016 - 22:44
      +2

      You'd be surprised.

      A while back I was left a voicemail saying they were calling from "the tax department". They wanted me to call back on a specific phone number, quote a reference number, and have identification information handy. All very suss, however I had been expecting a possible call from the ATO a few months earlier.

      I rang the main ATO number and they agreed it was likely a scam, but pulled up my details and there was a note on my record saying they'd phoned me up at that time and left a message. I got transferred and had my issue sorted out, and told the guy his message seemed very unprofessional with all the scams around. He didn't care.

    • [Deactivated] on 03/03/2016 - 10:15
      +1

      The call was not from the ATO; it was from his tax agent. It is obviously not a scam.

      • pointless martyr on 03/03/2016 - 12:31
        -4

        Ummm you are just repeating what has already been stated with the obvious addition "it is obviously not a scam"

        A lot of phonecalls claiming to be from tax office are scams and any publicity is good publicity IMO

        Obviously

  • frostman on 02/03/2016 - 12:16
    +2

    OP here..

    Sadly the news is true.

    I just called the ATO and they advised that there is a ~$800 debt owing.

    NFI idea why they went to the accountant, and also apparently it's with a debt collector and that the debt due date was SEP-15 , lol…I just got the call from my accountant today

    Anyway…jist of the story is, there were undeclared income (from my small managed fund).
    I've advised them that i've provided by TFN to the managed fund and thought my income was based off that, turns out no. So just a lesson to everyone else!

    • spersephone on 02/03/2016 - 12:43
      +4

      If your tax return states that your accountant is your contact person with regard to tax matters, then documentation should have been sent to them. However, if you have an overdue account, this should have also come through the accountant, so you should be asking them why you knew nothing about it until now.

      If there is any interest being charged to the debt, I would send a letter advising that this was the first you knew about it and to organise to pay for it, and request they waive the interest if possible.

  • Voldox on 02/03/2016 - 12:39

    If the debt was due and your tax account only just told you then they should be liable for any fees (Late Payments, Interest etc) on top the original debt if there is any since its their fault for not notifying you.

    Work out a plan or pay it off with the ATO asap

    • ozhunter on 02/03/2016 - 12:47

      Late payment and interest, yes. Original debt, no.

  • loke on 02/03/2016 - 12:59
    +3

    As per spersephone's comment, request a remission of penalty if there is one, you can also talk to your tax agent to look it up on their tax agent portal to see if there are any penalties and ask them to send a request too. Also double check your address details and why you never received any letters / notifications.

    I think you'd have to pay up the entire amount first too (even if on a payment plan), before they are able to reverse the penalty.

  • frostman on 02/03/2016 - 13:36

    thanks folks

    • mshanann on 02/03/2016 - 15:03
      +2

      I had a similar thing happen to me.

      ATO switched me to PAYG Quarterly Tax Installments due to a one-time $1600 additional income amount I had the previous year.

      They wanted me to pay $405 per quarter in advance.

      None of this however was conveyed to me in person. Instead ATO used some My Gov online notifications which I didn't look at, along with sending some letters to may Tax Accountant (whom also failed to pass it on).

      The next thing I know, I receive out of the blue a letter forwarded from my Tax Accountant that ATO had passed on my debt to a 3rd party - Dun & Bradstreet (Debt Collection Services) for collection.

      I gave ATO a call and they basically said as my part of the My Gov registration, the small print stated that I agreed to receive and read notifications online, etc etc, and that it was my responsibility to ensure I do so.

      I then basically demanded why I should have to pay installments in advance if I have no additional income outside of regular PAYG for the current year, and why they hadn't tried to contact me directly, given the small amount of $400 represented around 1% of the tax I pay them as regular PAYG employee each year. I had them change the 400 back to zero, and then had to dick around with the debt agency to get them to sync up with ATO.

      I was fuming - both with my accountant and the ATO. I also asked them whether my credit history would be affected. Supposedly credit history for federal tax debts is treated differently to normal private-entity debts such as bank / credit card etc, and there would be no mark left on my file.

      What really irked me is the rampant tax evasion that goes on with lots of small businesses in general, yet ATO would go after an individual over a quarterly pay-in-advance *****possible***** tax debt worth only $400 and 1% of the tax paid each year. As it turns out, the ####s will probably end up owing me money for the tax year. If only I could get ATO to return me a refund in advance and quarterly, and respond with a debt collector if they don't respond to my notifications.

  • frostman on 02/03/2016 - 20:15

    What really irked me is the rampant tax evasion that goes on with lots of small businesses in general

    This is exactly what I told a mate after I learned of my predicament.

    The idiots constantly chase up people on PAYG, mind you my annual income isn't all that, I pay ~$18-20K tax / year. Whatever I can claim back the little nigglies, I do.

    I personally know 2 people, one with a small café who only accepts cash (no EFTPOS) his balance sheet for 4 years stated his total earnings are < 45K.
    Mind you the 8 empty milk crates stacked beside him tell a different story. He still gets Centrelink for all children and maximum childcare. However the BMW X6 and 335i are just round around cars.

    Instead, ATO waste time chasing up some < $700 monies I earnt over 1 year in a managed fund and after a $900 pay-back. SCUMS

    • CheapskateQueen on 02/03/2016 - 22:18
      +2

      You should report these ppl. You can do so anonymously. It's one thing to cheat taxes but it's despicable to be earning good money, under pay tax AND cheat centerlink payments!

      As for why the ATO didn't contact you directly, it would be because your agent is listed as your contact person/contact phone number and contact postal address on their system. That's up to you to check and keep up to date.

  • kuhari on 03/03/2016 - 09:11

    Create a Mygov account on department of human services website, link the ATO to your myGov account. If you have a tax debt, the debt will show in your ATO account when you go into it.

  • Seraphin7 on 03/03/2016 - 11:11

    A. Yes.

    B. Yes. The TFN allows the ATO to calculate your gross earnings. It also allows the ATO to calculate the tax already paid and offset this against the net tax you must pay given your net earnings after deductions. Depending on your situation it is entirely possible that with shares and managed fund holdings you will have extra tax to pay. Your accountant will be able to explain all of this very easily.

  • Sparkz71au on 04/03/2016 - 21:18

    A. The ATO may contact your Accountant if you have previously authorised them as your agent.
    B. (1,2,3). Your Accountant should have info about any tax credits/debts payable. That's there job in the first place!

    Ask your accountant - Did they make a mistake? I assume you provided the correct info & paid them to do their job.

    Beware. At the end of the day you sign off on all the paperwork, even if the accountant makes a mistake you accept the same as your mistake.

    Any investment income attached to your TFN is obviously provided to the ATO. The same info should detailed on your tax return.

    Maybe it's time to change accountants? If they did their job you would not be in this position. You are accountable to ATO, not the accountant/agent. (read the small print).

    Good luck.

    • frostman on 05/03/2016 - 20:47

      Sounds good, im going to look elsewhere for an Accountant

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