Tax consultant: complete removal of two decades’ worth of GIC

A tax consulting firm representing a complainant approached us about a significant amount of General Interest Charges (GIC) imposed by the ATO—spanning over 20 years. The GIC had grown to more than six times the original tax liability.

The taxpayer permanently left Australia in 2004 and relied on a tax agent to lodge his final returns. Unfortunately, those returns were never lodged, and the issue only surfaced in 2023 when he applied for a Foreign Resident Capital Gains Withholding (FRCGW) tax variation on a property transfer. He acted promptly to lodge and pay the outstanding returns, but the ATO imposed GIC from 2005 through to the present day. While the original tax liability was $41,000, the GIC had compounded to over $275,000.

Despite multiple attempts by the tax representative to seek GIC remission, the ATO declined. When the matter came to us, we argued that imposing GIC was unfair given the taxpayer’s circumstances: he had permanently departed Australia, appointed a tax agent to manage compliance, and only discovered the issue decades later. The tax agent had been deregistered in 2013, leaving the taxpayer with no way to correct the oversight earlier.

After reviewing the facts, the ATO agreed to remit the GIC in full. This decision recognised that the taxpayer acted as soon as practicably possible once he was aware of the issue and could not reasonably have mitigated the situation earlier.