Tax agent: when an agent’s health crisis led to unfair interest charges

An otherwise compliant company was surprised to find itself facing more than $39,000 in interest charges — not because it ignored its obligations, but because its tax agent became seriously unwell.

A tax agent approached us after the ATO imposed general interest charges (GIC) following the late lodgement of five years of company tax returns. Four of those returns were overdue, resulting in GIC totalling $39,334.72. The client had no record of poor compliance and had relied on their agent to manage their ongoing obligations.

The tax agent applied for GIC remission on medical grounds, providing specialist reports outlining significant mental health issues and serious family related problems that affected his capacity to work. However, the remission request was initially declined.

We engaged with the ATO to explain that the agent’s incapacity directly affected his ability to meet lodgement deadlines and that the outstanding returns could not be lodged until his condition stabilised. We also highlighted that the client had no reasonable way of knowing their agent was incapacitated.

After reviewing the circumstances, the ATO agreed to remit GIC for the period during which the tax agent was incapacitated, amounting to $14,942. GIC accrued after that period was not remitted, as the ATO considered the agent had recovered sufficiently to resume work and ultimately lodged the returns.

While the full amount of GIC was not removed, the outcome recognised genuine incapacity and reduced the unfair impact on a client with a strong compliance history.