Squeezing Blood from Stones? A Comparative Analysis of Tax Relief for Victim-Survivors in Australia and the United States

Abstract

Women who leave abusive relationships generally do so with increased debt, reduced assets, insecure housing and longer-term economic insecurity. Most of these women will be experiencing economic abuse even after the relationship has ended, and many cite financial instability as a key factor driving them back into abusive relationships. So, it is imperative that the tax and transfer system helps rather than hinders (albeit inadvertently) this cohort of financially vulnerable taxpayers. However, this is not always the case, with victim-survivors of economic abuse often liable for tax debts incurred by former partners operating businesses in the victim-survivor's name.

This article explores the tax collection practices and grounds for relief from tax debts available in Australia and the United States to survivors of economic abuse on grounds of serious financial hardship. It outlines both the legislative history and regulatory landscape, and explores the systemic issues faced by survivors of domestic violence. Identifying lessons learnt from developments in the United States, this article offers evidence-based recommendations to modernise Australia’s tax laws and regulations. These recommendations are designed to attain better outcomes for survivors of economic abuse while also maintaining trust and confidence in the Australian Taxation Office among the wider community.

ISSN

0812-695X

Disciplines

Law | Tax Law

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