Answer to Question #78875 in Finance for Liam Johnston

Question

What are the possible consequences of taxpayers failing to correctly report an amount they are required to pay or meet other tax obligations?

Answer 1

The tax laws authorise the ATO to impose administrative penalties for conduct such as:
• making a false or misleading statement or taking a position that is not reasonably arguable
• failing to lodge a return or statement on time
• failing to withhold amounts as required under the PAYG withholding system
• failing to meet other tax obligations.
The purpose of the penalty provisions is to encourage taxpayers to take reasonable care in complying with their tax obligations. We take into account your circumstances when deciding what action to take.
If you're liable for a penalty we'll notify you in writing of the reason for the penalty, the amount and the due date for payment, which will be at least 14 days after the notice is given. You’re unable to claim a deduction for penalties we impose.
The penalty amount is calculated using either a statutory formula, based on your behaviour and the amount of tax avoided, or in multiples of a penalty unit.