Joseph Frangieh Wins – ATO completely withdraws assessment

After almost 6 years of battling with them, ATO completely withdraws assessment of over 3.2 million dollars in tax, interest, and penalties assessed to Australian property developer.

Sydney based property developer, Joseph Frangieh, has spent a good part of the last six years of his life fending off an unrelenting ATO who assessed to him over $3.2 million in tax, interest, and penalties on the basis of allegedly underreporting his income back in 2007. Finally, in June 2015, the ATO’s assessment was completely withdrawn.

The probe into Mr Frangieh’s affairs started around October 2009 after being identified as a business associate of property developer George Cheihk who the ATO failed to collect anything from after he became bankrupt. Mr Frangieh was also one of Mr Cheihk’s creditors and lost a lot when Mr Cheihk became bankrupt. The ATO went after Mr Frangieh anyway. The $3.2 million liability was raised in October 2012, over four years after the 2007 financial year, and was largely based on ATO auditors treating repayments made into Mr and Mrs Frangieh’s line of credit secured over their family home as Mr Frangieh’s income. Despite numerous attempts by Mr Frangieh and various tax professionals to explain to the auditors how wrong they were, their efforts fell on deaf ears and assessments issued. The ATO almost immediately commenced Court action against Mr Frangieh on the basis of the factious assessment raised at audit, while Mr Frangieh continued to dispute the assessment, leaving him fighting on two fronts to defend himself.

After lodging a complaint, on or around April 2013 the ATO acknowledged that the method the auditors had adopted was flawed failing to, for example, look at obvious things like withdrawals made from the account. However, the assessment, and the legal action, remained on foot.

On or around September 2014 the ATO agreed that most of the repayments to the Frangieh family’s line of credit were not his income. Explanations and evidence that had previously been provided to the auditors was finally accepted. An amendment was made to the audit assessment leaving over $1 million still allegedly payable.

In June 2015, after the matter was taken to the Administrative Appeals Tribunal, the ATO withdrew the rest of the 2007 financial year assessment, and, by the end of July, the ATO also agreed that it needed to drop its legal claim for the money, however, would not agree to pay Mr Frangieh’s costs for defending against it.

It was clear, right from the beginning, that the campaign against Mr Frangieh was ill conceived. But it was not until after considerable time, costs, stress, and lost opportunities, that Mr Frangieh was finally freed from the ATO.

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