ATO garnishee notice: The ATO can empty your bank accounts
If the ATO has issued a garnishee notice to your bank or any other third party that owes you money, you should contact King Lawyers immediately and get legal advice.
What is a garnishee notice?
A garnishee notice is a legal order issued by the Australian Taxation Office (ATO) to a third party that holds money on your behalf to pay an amount related to your tax debts directly to the ATO. For example, the ATO may issue a garnishee notice to your bank and legally order your bank to pay the money that is held in your bank account under your name to the ATO for the payment of your tax debts.
The ATO’s legal power to issue a garnishee notice
Under section 260-5 of schedule 1 of the Taxation Administration Act 1953, the ATO has the power to recover “tax related liabilities” and certain other debts payable to the Commonwealth from third parties that owe money to, or hold money for, a tax debtor.
The ATO may issue a garnishee notice to various third parties
The ATO can issue a garnishee notice to:
- Banks or other financial institutions
- Trade debtors for the tax debtor’s business
- An employer who owes money to the tax debtor
- A contractor who owes money to the tax debtor
- A purchaser of land or property from a tax debtor
- Solicitors holding trust funds on behalf of the tax debtor
- Superannuation funds
Act quickly and deal with your tax debt with the ATO
Do not ignore the ATO’s warning letters about your tax debts. If you have received a red warning letter from the ATO, this is usually a final warning before the ATO takes legal and debt recovery action against you.
If you have a tax debt with the ATO, you should act quickly, get legal advice and deal with your tax debts as soon as possible.
Your tax debts will not go away by themselves and burying your head in the sand will not solve the problem. The longer you ignore your tax debts, the larger they will become as the ATO charges a high rate of interest on your unpaid tax debts on a daily basis. Therefore, the sooner you act, the better it will be for you.
Legal advice from King Lawyers on ATO tax debts
This article is offered as general information only and should not be relied on as specific legal advice on ATO garnishee notices or your tax debts with the ATO.
To get legal advice from King Lawyers on your specific circumstances, please contact us to arrange an initial consultation with our experienced tax lawyers.
