In a recent IGTO investigation, the complainant asked the Commissioner to exercise his discretion to refund the complainant’s 2023 tax refund instead of offsetting against his tax debt. The complainant was in urgent need of his refund to prevent an immediate risk of homelessness, which he had provided evidence of.

The complainant’s original request was denied. The ATO advised that it was too late. This was because he entered into a payment arrangement after his 2023 income tax credit had been posted to his account (the complainant had called to enter a payment arrangement the day after lodging). The complainant was provided with this advice on at least seven separate occasions by the ATO.

During the IGTO investigation, the ATO provided the IGTO with internal ATO (OPAL) advice that was contrary to their original decision. The advice confirmed the Commissioner’s discretion to refund instead of offsetting is available if a complying payment arrangement is entered into before the credit crystallises – when the Notice of Assessment is issued. OPAL also clarified that it is not necessary for a payment to have been made under the payment arrangement for it to be considered compliant.

Despite the OPAL advice, the deciding officers re-considered the complainant’s request and maintained their position, in part, on the basis that the complainant had a history of compliance issues. The facts show the complainant had one adverse audit, and the ATO was aware the complainant intended to object to this outcome when they were in a financial position to do so.

The ATO had confirmed on two occasions that the complainant’s circumstances fell under serious financial hardship. The deciding officers denied the request by placing great weight on one compliance issue and the resulting advantage compared to compliant taxpayers, but only gave a brief reference to the demonstrated hardship claim that masked the serious and immediate risk of homelessness that would
ultimately result.

Following urgent discussions between the IGTO and senior ATO officers, the ATO reversed their decision, and the complainant has since been provided his refund.