GSJW and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal (AAT) considered an application for review of an objection decision made by the Commissioner of Taxation. The dispute concerned whether the applicant should be released from his tax liabilities, specifically whether he would suffer serious financial hardship if required to satisfy them. The applicant’s tax debt was substantial, comprising primarily General Interest Charges (GIC) and a smaller amount of income tax.

The Tribunal was required to determine whether the applicant met the criteria for release from his tax liabilities, considering the income/outgoings test, the assets/liabilities test, and other relevant factors. Specifically, the Tribunal had to assess whether the applicant had paid other debts in preference to his tax obligations, acquired assets ahead of meeting his tax liabilities, and whether his poor compliance history, exacerbated by his diagnosed Attention Deficit Hyperactivity Disorder (ADHD), warranted a release.

The Tribunal found that the applicant satisfied the income/outgoings and assets/liabilities tests, acknowledging his inability to service his tax liabilities within a reasonable timeframe. However, the Commissioner had previously contended that other factors, including the applicant's preference for paying other debts, acquisition of assets, and a consistent failure to meet tax obligations, weighed against granting a release. The Tribunal accepted evidence from the applicant's treating psychiatrist, who confirmed that the applicant's ADHD significantly impacted his executive function, disorganisation, and time management, leading to his non-compliance. The Tribunal considered these circumstances to be beyond the applicant's control and concluded that granting a partial release from the tax debt was appropriate.

The Reviewable Decision was set aside and substituted with a new decision granting the applicant a partial release from his tax liabilities.