A sole trader taxpayer had a dispute (or unresolved complaint) with the ATO concerning its intention to disclose a $590,000 tax debt to Credit Reporting Bureaus (CRB) and had been offsetting their tax refunds against the debt. The taxpayer believed the ATO was discriminating against them given they were previously incarcerated and a discharged bankrupt.

The IGTO’s investigation found that there was a primary tax debt amount of $100,000 which was incurred in 2005, however, by 2008 the taxpayer entered bankruptcy and was discharged in 2011. Accordingly, the primary debt amount and interest accrued until the time of discharge should have been treated by the ATO as irrecoverable at law. However, the ATO was unaware of the bankruptcy and discharge, and the debt accrued interest for 15 years which resulted in the total debt amount of $590,000.

As a result of the IGTO’s investigation, the ATO treated the debt as irrecoverable at law, did not disclose any debts, and returned refunds to the taxpayer. The taxpayer was satisfied with the outcome of the IGTO’s investigation, stating “I really appreciate your help. It’s rare to find someone these days that would go out their ways to help people like me.”