Commentary on Provisions Part 5 – Enforcement of the levy and penalties Chapter 3 – Penalties Section 55 – Reasonable excuse for failure to keep and preserve records
94.This section provides that no liability to a penalty arises under section 54 where a person who has failed to comply with the duty in section 28 has a reasonable excuse for the failure (subsection (1)). An insufficiency of funds is not a reasonable excuse (subsection (2)(a)), nor is that the person relied on another person to do things (unless the person who failed to comply took reasonable care to avoid the failure – subsection (2)(b)). An example of a reasonable excuse here may be where the liable person's office is destroyed by fire. Where the reasonable excuse ceases to apply, the person who failed to comply with section 28 is still able to rely on the excuse, provided the failure is remedied without unreasonable delay (subsection (2)(c)).