Mr and Mrs Anonymous had placed their business into liquidation in late 2017. Their lodgement of the appropriate documents and forms and the payment of statutory obligations was not the most efficient during the later years of the business.
Sometime after the company was placed into liquidation, the ATO issued Director’s Penalty Notices (DPNs) to both our clients. Our clients refuted the amounts of the DPN however, the ATO rejected the appeal. Resulting from this, the ATO then commenced proceedings in the County Court of Victoria against our clients in the amount of $338,539 for the DPN’s, failure to lodge fees and court costs.
Our clients still refuted the amount the ATO was demanding in the Statement of Claim lodged with the Court. Mr and Mrs Anonymous acknowledge there were outstanding amounts however, in their opinion the amount owing was considerably less.
To successfully defend the claim, their lawyer advised them that a full reconciliation would need to be completed between the ATO’s records and our clients. This reconciliation was going to be very time consuming and costly should an external accountant complete the work.
As Mr Anonymous has finance experience, he decided to complete the reconciliation with our help. The reconciliation proved that the amount claimed by the ATO in the Statement of Claim was incorrect and the actual amount owing to the ATO was collectively approximately $60,121. This is a reduction in approximately $278,418 from the original amount of $338,539. The ATO reviewed the findings, and agreed with our clients.
In most cases, people would assume the amounts stated by the ATO and either enter into an onerous payment plan or enter into personal bankruptcy. Whilst this is a simplified version of the facts, it highlights that you shouldn’t assume the ATO are correct.
Should you have clients or associates that you know are struggling with financial issues or need assistance in reviewing their business affairs in preparation for what’s around the corner, our team of Strategists would be pleased to discuss options that are available on how to best design and implement insolvency strategies. Contact us now on p. 1300 765 080 | ua.mo1725739134c.arj1725739134d@ofn1725739134i1725739134
Did you know?
Phoenixing is another name of business restructure. Read more about business restructures and when this can be an option for you.
