{"id":733,"date":"2022-01-21T14:18:41","date_gmt":"2022-01-21T14:18:41","guid":{"rendered":"https:\/\/goldman-lawyers.com\/online-law-communitya\/?p=733"},"modified":"2022-01-21T14:18:49","modified_gmt":"2022-01-21T14:18:49","slug":"court-considers-late-lodgement-of-tax-returns-bars-departure-from-child-support-obligations","status":"publish","type":"post","link":"https:\/\/goldman-lawyers.com\/online-law-community\/court-considers-late-lodgement-of-tax-returns-bars-departure-from-child-support-obligations\/","title":{"rendered":"Court Considers Late Lodgement of Tax Returns Bars Departure from Child Support Obligations"},"content":{"rendered":"\n

Key Words: <\/strong>Child Support; Child Support (Assessment) Act 1989; administrative assessment; departure order; child support liability; failure to lodge tax returns; deemed income<\/p>\n\n\n\n

The case of Dalton & Munro & Anor<\/em> [2015] FCCA 2945 (24 June 2015) was a Federal Circuit Court of Australia case heard by Judge Scarlett.\u00a0 In this case, the Applicant Father asked the Court for a departure order to reduce the Child Support Agency\u2019s administrative assessment of his child support liability.<\/p>\n\n\n\n

As the Applicant had not lodged 3 years\u2019 worth of tax returns, the administrative assessment was based on a deemed (estimated) income.  After the Applicant lodged his tax returns it was determined that his taxable income was lower than the deemed income used to calculate the administrative assessment.  Had the Applicant lodged his tax returns on time his child support liability would have been less.  For the reasons that follow, the Court denied the Applicant\u2019s request for a reduction in his child support liability.<\/p>\n\n\n\n

Background<\/strong><\/p>\n\n\n\n

The Applicant\u2019s child support liability commenced in 1997 at the time of the birth of the Applicant\u2019s son.  The son was in the mother\u2019s care and the Applicant was assessed to pay child support.  In September 2010 the mother contacted the Child Support Agency and asked them to commence collection of child support payments on her behalf.<\/p>\n\n\n\n

The Applicant claimed that he was never contacted by the Child Support Agency and was unaware of the requirement to pay child support.\u00a0 As the Applicant did not lodge tax returns for the financial years 2011, 2012, and 2013 the Child Support Agency under section 58 of the Child Support Actcalculated a deemed income for the administrative assessment based on the Applicant\u2019s last available tax assessment.<\/p>\n\n\n\n

Child Support Commenced Proceedings<\/strong><\/p>\n\n\n\n

As the Child Support Agency was unable to collect child support from the Applicant for the period 10 October 2012 to 19 June 2014 a debt accumulated for $27,394.53.\u00a0 After continued attempts to contact the Applicant without success, the Child Support Agency commenced court proceedings to enforce payment of the debt owed.<\/p>\n\n\n\n

Application Seeking Departure Order<\/strong><\/p>\n\n\n\n

After the Applicant received notice of the Child Support Agency\u2019s enforcement action, the Applicant submitted an Application to the Court seeking a stay of the Child Support Agency\u2019s enforcement action and a departure order under Part 6A<\/em> of the Child Support Actto retrospectively reduce the child support assessment for the period 10 October 2012 to 19 June 2014.<\/p>\n\n\n\n

In his Application, the Applicant claimed that he was not aware the Child Support Agency was seeking child support payments.\u00a0 Further, the Applicant explained that he had not submitted his tax returns because his bookkeeper had left and he had difficulty finding a suitable replacement.<\/p>\n\n\n\n

Upon submitting his tax returns for the 2011, 2012, and 2013 financial years the Applicant\u2019s taxable income was less than the deemed income that was used for his administrative assessment.\u00a0 Had the Applicant submitted his tax returns in a timely manner his administrative assessment would have been less?<\/p>\n\n\n\n

Court\u2019s Refusal to Depart from the Administrative Assessment<\/strong><\/p>\n\n\n\n

The Court refused the Applicant\u2019s application to reduce the Child Support Agency\u2019s administrative assessment.  When a court considers a departure order from an administrative assessment it must be satisfied under section 117 of the Child Support Act that there are grounds to do so.  These grounds include consideration of whether either parent\u2019s capacity to provide financial support is significantly reduced because of:<\/p>\n\n\n\n

(i)                  their duty to maintain any other child or another person;<\/p>\n\n\n\n

(ii)                their duty to maintain any other child or another person that has special needs; or<\/p>\n\n\n\n

(iii)               their need to support themselves.<\/p>\n\n\n\n

The Applicant did not provide any evidence that would meet the section 117 test for a departure order.  Further, consideration of the mother\u2019s circumstance revealed that she was only receiving a disability support pension and that she had been deprived of financial support with raising the son by the Applicant not paying child support.<\/p>\n\n\n\n

The Court also considered the Applicant\u2019s reason for not lodging his tax returns and decided the reason was inadequate.  Judge Scarlett cited the case of Registrar & Rawlings<\/em> [2013] FCCA 730 as grounds that \u201crepeated and continuing failure to lodge income tax returns will lead to adverse consequences, for which parties can expect to receive little sympathy from the Court\u201d.  Further Judge Scarlett cited the case of Harcherl & Berrios<\/em> [2010] FMCA fam 668 stating that if a payer of child support does not lodge tax returns and comes to the court without reasonable excuse the payer would not be granted relief.<\/p>\n\n\n\n

Judge Scarlett also considered the timing of the Applicant\u2019s application for a departure order.  As the application for a departure order was only made after the Child Support Agency\u2019s commencement of enforcement proceedings it was considered \u201chighly undesirable\u201d to allow the departure order citing the case of Bauer & Becker<\/em> [2009] FMCA fam 480.<\/p>\n\n\n\n

Conclusion<\/strong><\/p>\n\n\n\n

In this case, the Applicant’s father was unable to provide evidence that would have allowed the Court to grant a departure order from his child support administrative assessment.\u00a0 There was evidence to the contrary that to do so would put the mother in further hardship.<\/p>\n\n\n\n

The Court also considered that had the Applicant lodged his tax return in a timely manner he could have avoided the deemed (estimated) rate of child support and the higher debt that accumulated because of the deemed rate.  The Court considered that as the Applicant did not provide reasonable grounds for late lodgment of 3 years\u2019 worth of tax return the Applicant would not be granted any relief.<\/p>\n","protected":false},"excerpt":{"rendered":"

Key Words: Child Support; Child Support (Assessment) Act 1989; administrative assessment; departure order; child support liability; failure to lodge tax returns; deemed income The case…<\/p>\n","protected":false},"author":1,"featured_media":529,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,60],"tags":[],"yoast_head":"\nCourt Considers Late Lodgement of Tax Returns Bars Departure from Child Support Obligations - Online Community Goldman Lawyers<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/goldman-lawyers.com\/online-law-community\/court-considers-late-lodgement-of-tax-returns-bars-departure-from-child-support-obligations\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Court Considers Late Lodgement of Tax Returns Bars Departure from Child Support Obligations - 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