ZDCW and Commissioner of Taxation (Taxation)

This matter concerned an application by the applicant, ZDCW, for release from taxation liabilities, which was reviewed by Deputy I R Molloy P of the Administrative Appeals Tribunal. The dispute arose after the Commissioner of Taxation disallowed the applicant's applications for release from his tax debts, which were based on income received from an income protection policy between 2010 and 2013. The applicant, diagnosed with Parkinson's disease in 2006 and forced into early retirement in 2009, claimed he was unaware these payments constituted assessable income until 2012, subsequently lodging his tax returns in 2014.

The Tribunal was required to determine two key issues: firstly, whether the applicant would suffer serious hardship if not released from his tax liability, and secondly, if serious hardship was established, how the Commissioner's discretion to grant release should be exercised. The applicant bore the onus of demonstrating that the Commissioner's decision should not have been made or should have been made differently. The Tribunal considered the ordinary meaning of "serious hardship," which involves an assessment of the taxpayer's individual circumstances against normal community standards and their financial affairs, including those of their household.

In reaching its decision, the Tribunal acknowledged that not all factors relied upon by the Commissioner supported a refusal to exercise discretion. However, after considering all circumstances, the Tribunal concluded that the discretion should not be exercised to grant relief. This conclusion was primarily based on the applicant's failure to make proper provision to meet his tax liabilities and his preference to pay other debts over his tax obligations. The Tribunal affirmed the objection decision under review.