ATO getting tough on those who don’t respond

From June 2022, the ATO has warned tax agents that their clients may receive new correspondence that includes information about both their outstanding lodgement and payment obligations.

These letters will be issued to clients who have failed to resolve their outstanding obligations, despite our previous attempts to engage.

The ATO said it had scaled back its collection action due to recent disasters and COVID-19 and as things start to return to normal it is recommencing stronger actions, especially where there is evidence that a client is choosing not to comply with their obligations.

The new letter is worded more strongly as it is designed for those who have not responded to the ATO’s previous communication.

In the past, the ATO said its communication with taxpayers focussed on either lodgement obligations or outstanding debts but following on from feedback it received decided it’s more efficient and effective for taxpayers and agents to receive one letter showing all outstanding obligations.

“If your client receives one of these letters, we hope they will engage with you to bring their lodgments up to date and enter into a payment plan. You can also encourage them to contact us so that we can work with them to get back up to date with their debts,” the ATO said.

“Support is available if there are circumstances beyond your control preventing you from lodging your client’s returns on time. Depending on the issues you’re facing, you may be able to submit a lodgment program deferral or additional assistance via the supported lodgment program.

“If your client has one or more prior year tax returns overdue as at 30 June, their current year tax return due date is 31 October. If all overdue prior year tax returns are lodged by 31 October 2022, the 2022 tax return will be due according to your normal lodgment program.”