Practical Ways to Negotiate ATO Solutions & Tax Debt Relief

Resolving Urgent Tax Debt Issues: Practical Steps for Success

Facing tax debt can be overwhelming. Certainly, effective tax debt solutions are available to obtain tax debt relief. However, it is important to keep in mind that the ATO adjusts thier motivational levels with recovery of tax debt.

Examples of ATO Motivation Changes:

Example 1: Through Covid lockdowns the Australian Tax Office put a hold on tax debt collection. Consequently allowing businesses to continue without forceful collection processes.

Example 2: More recently, the ATO  has escalated the collection process and pressuring businesses to bring their ATO accounts up to date. Indeed this is to assist the government in recovering their losses as a result of Covid, and foster competetion in Australia.

As a result, you may be caught unaware of the change in collection activities.

If you are struggling to pay you ATO bill. Here's how you can tackle your tax debt head-on:

1. Act Early and Act Fast: It's crucial to take prompt action when you realize you have a tax debt issue. The Australian Taxation Office (ATO) closely monitors communication and compliance, so being proactive is key to resolving the situation swiftly.

2. Review Your ATO Tax Portal Accounts: Take the time to review all your ATO Tax portal accounts to get a comprehensive understanding of the total amount owed. Sometimes, a tax bill may not be immediately evident across all accounts, so it's essential to cross-check and verify balances. Indeed, the tax accounts could include GST withholding tax, personal tax debt, company tax debt and superannuation debt.

3. Seek Professional Assistance: Engage the services of a reputable bookkeeper and accountant to ensure your financial records are up-to-date and compliant with tax law & regulations. This is especially important if you're registered for GST and need assistance with BAS lodgements.

4. Plan Your Taxation Payment Plan: If you're dealing with a large tax debt consider a tax payment plan. However, the ATO may require an intial lump sum payment before allowing an ato payment plan to be set up. Certianly, it's crucial to carefully plan your australian taxation office payment plan to meet both your tax obligations and any agreed-upon payment schedules. However, a payment arrangement can be an effective tax debt solutions. 


5. Maintain Open Communication: Stay in regular communication with the ATO and respond promptly to any requests or deadlines. Therefore, we recommend a telephone call to the tax office ato and keeping the lines of communication open. Indeed, this  demonstrates your willingness to cooperate and resolve the tax debt issue amicably.

6. Clear the Tax Debt if Possible: If financially feasible, consider clearing the tax debt in full with a tax debt loan. Certainly, paying your tax debt in full would help avoid complications with payment schedules and agreements. Indeed, missing or late payments can result in the cancellation of payment plans, requiring you to reapply and potentially face additional hurdles. However, you can check the potential benefit with  our debt consolidation calculator.

7. Be Proactive: Don't wait for the ATO to initiate contact. Take proactive steps to address the tax debt issue, whether it involves paying off the debt or negotiating favorable payment terms, including a payment plan for taxes or an Australian Taxation Office payment plan. Consulting with your accountant can help determine the best course of action for your specific situation.

Tax Debt Case Studies:

See below 3 real world examples of businesses; and the people managing a tax debt and the outcome. Indeed, you will see that pro-activity helps the long term outcome. 

Client 1 Tax Debt Relief Story:

Client 1 was running a business and was trading well with good profit. Indeed, the BAS was lodged on time and everything was paid. However, the BAS was completed incorrectly.

Their book keeper had not included the Company Income Tax or advised the client of an estimate.  Therefore, 2 years after the business started all the tax was paid except the company income tax. Plus the upcoming year will be additonal to the 2 years tax owed which is $130,000. 

Tax Debt Solution:

The tax debt was refinanced using the equity in the clients home plus additional funds obtained for the upcoming year. Consequently, there was little issue with the ATO because client 1 was pro-active in contacting the ATO, keeping in communication and resolving the issue.


Client 2 Tax Debt Story:

Client 2 was torn between many different tax debt solutions. Plus they were advised by their book keeper that their tax debts can be released. However, this did not eventuate and they didn't want any of the other options.

Their small business was severly affected with a down turn through the covid pandaemic. Even though, the clients' business recieved government support. indeed, coming out of Covid the business did not fully recover. Certainly, the recovery was slow and the turnover did not achieve the level of sales as before Covid. As a result, they closed the business and both the directors, husband and wife took paid jobs.

Through the time they revived Director Penalty Notices and when they finally completed their tax return it was found to their surprise there was another large personal tax debt. In hindsight, the business traded after covid for too long and the owners took most of the income to survive &  personally paying home loans and personal debt. Consequently, the tax on the drawing  from the business was not paid.

Tax Debt Solution:

The home loan was quite a large amount that exceeded their ability to pay on the lower wages. Plus, they were in financial hardship. However, the equity was substantial. 

The clients tried their best to battle through, however they did leave the issues for some time trying to find a solution. Also, they heard you could get a release from your tax debt because of covid . Certainly, they were trying to find what information was real and what was not. In reality, the directors penalty notice had lapsed and which allowed the ATO to assign the company debt to the directors.

They applied with various lenders, and attempted to take secialist finance. Although, they did not meet any of the lenders requirements. Consequently, the clients eventuially sold their home and paid back the tax debt and other debts. Then purchased another house.

Further Recommedation:

These clients did end up finding tax debt relief however the tax matter continued for too long. Plus they did not keep in communication with the ATO. Therefore the end result was that they had a poor credit rating.

The client found tax debt relief in a tax debt loan. However they an inntial and secondary strategy is required to reduce the interest rate they obtained. Indeed, if they were more pro-active they may have achieved a more cometetive interest rate on their purchase.

Certainly, Tax and the ATO can be difficult to navigate. Each client and their tax issue is different. The ATO and tax is a complex area and circumstances vary with each business.


For tailored assistance with tax debt solutions, contact Loan Saver Network at 1300 796 850. Our experienced team specializes in helping individuals and businesses navigate tax debt challenges effectively.

By following these practical steps and seeking professional guidance, you can successfully resolve your tax debt issues and regain financial stability. Don't hesitate to take action and address your tax debt problems today.

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