If you have a tax debt which you cannot pay, one option to deal with the debt can be to put forward a proposal for a Personal Insolvency Agreement.  A Personal Insolvency Agreement is a binding agreement with your creditors to compromise your debts.

To propose a Personal Insolvency Agreement, you have to appoint a Trustee (who can be from Tax Debt Solved) to take control of your property and make an offer to your creditors.  As part of this process the Trustee also prepares a report on your circumstances and your proposal including whether it will be better than bankruptcy.  The Trustee also convenes a meeting of creditors to vote on the proposal.

For people with large tax debts, often whether creditors accept (vote FOR) a proposal comes down to how the ATO votes.  So, what factors does the ATO consider when deciding how to vote?

ATO guidelines on voting

In determining how to vote the ATO considers various factors including (as per their guidelines).  These include:

• The contents, comprehensiveness and adequacy of relevant reports prepared by the Trustee.
• Documents provided by the debtor to their Trustee and the debtor’s overall compliance with their Trustee’s requirements.
• Whether the Trustee is recommending the proposal.
• The debtor’s tax compliance history and compliance history of related parties.
• Whether the proposal is likely to be better than bankruptcy, including whether this is a tangible benefit to the Commonwealth revenue.
• The likelihood that a debtor will comply with payment terms of their proposal.

At TAX DEBT SOLVED we have helped administer numerous Personal Insolvency Agreements and while we can never be certain as to what sort of a proposal the ATO might accept we can give guidance around what a proposal may include and how the ATO may view it.  So, if this is an option you may be considering, please give us a call today.

Contact us for assistance

 If you are having difficulties paying your tax debts, the professionals at TAX DEBT SOLVED can help with a free, no-obligation consultation.  So, contact us today.