www.abc.net.au
Open in
urlscan Pro
23.46.224.106
Public Scan
Submitted URL: https://lo.vocom.online/
Effective URL: https://www.abc.net.au/news/2024-03-14/ato-reignites-old-debts-individuals-businesses-struggle/103578746?utm_campaign=a...
Submission: On March 21 via api from US — Scanned from US
Effective URL: https://www.abc.net.au/news/2024-03-14/ato-reignites-old-debts-individuals-businesses-struggle/103578746?utm_campaign=a...
Submission: On March 21 via api from US — Scanned from US
Form analysis 1 forms found in the DOM
<form aria-label="Search Keywords" class="AutoCompleteSearchBoxNext_autoCompleteForm___dBEd" action="" novalidate="" role="search">
<div class="AutoCompleteSearchBoxNext_autoCompleteInput__OTTch"><label class="ScreenReaderOnly_srOnly__bnJwm" data-component="ScreenReaderOnly" for="abc-search-input" id="abc-search-label">Search the ABC</label><input
class="AutoCompleteSearchBoxNext_autoCompleteInputElement__Vqz5l" aria-autocomplete="both" aria-labelledby="abc-search-label" id="abc-search-input" autocomplete="off" autocorrect="off" autocapitalize="off" enterkeyhint="search"
spellcheck="false" placeholder="Search…" maxlength="512" type="search" aria-describedby="searchHint" value=""><svg xmlns="http://www.w3.org/2000/svg" fill="none" viewBox="0 0 24 24" width="1em" height="1em" data-component="Search"
class="icon_icon__9kCSO AutoCompleteSearchBoxNext_inputSearchIcon__YjWGv icon_size24__GkyQ9" aria-hidden="true" data-testid="input-search-icon">
<path stroke="currentColor" stroke-width="2" d="m21 21-6.904-6.904m0 0a6.5 6.5 0 1 0-9.192-9.192 6.5 6.5 0 0 0 9.192 9.192Z"></path>
</svg></div><span class="ScreenReaderOnly_srOnly__bnJwm" data-component="ScreenReaderOnly" id="searchHint">Start typing for suggestions, press enter to search, or choose from a list of options below.</span>
</form>Text Content
THIS SITE USES COOKIES
The ABC uses cookies to improve your experience. Learn more about how we use
cookies
Accept all cookiesABC required cookies only
Skip to main content
ABC News Homepage
Set locationFor local weather
Search the ABC
Start typing for suggestions, press enter to search, or choose from a list of
options below.
Log InLog In
More from ABC
* Just In
* Watch Live
* Politics
* World
* Business
* Analysis
* Sport
* Science
* Health
* Entertainment
* Lifestyle
* Fact Check
* Other
News HomeABC News Homepage
The ATO is reviving old tax debts totalling billions, threatening some taxpayers
with bankruptcy
Share
THE ATO IS REVIVING OLD TAX DEBTS TOTALLING BILLIONS, THREATENING SOME TAXPAYERS
WITH BANKRUPTCY
By business reporter Nassim Khadem
Posted Wed 13 Mar 2024 at 9:21amWednesday 13 Mar 2024 at 9:21amWed 13 Mar 2024
at 9:21am, updated Wed 13 Mar 2024 at 10:00pmWednesday 13 Mar 2024 at 10:00pmWed
13 Mar 2024 at 10:00pm
YouTube 'Whiff of Robodebt': ATO revives old tax debts totalling billions
(Nassim Khadem)
abc.net.au/news/ato-reignites-old-debts-individuals-businesses-struggle/103578746
Copy linkLink copied
ShareShare article
After escaping an abusive partner more than a decade ago, Adriana Carrington
felt life was just getting back on track.
She had worked through years of therapy, finally got a mortgage for a new home,
and started her own business.
But she says the tax office has now derailed her life by hitting her with an
alleged tax debt dating back to the 2008-09 financial year — a debt she never
knew existed.
"I'm devastated, absolutely devastated; inconsolable," Ms Carrington tells ABC
News.
"After so many years, it makes it so hard, because you've got to go back through
historical documents that you do not have … it's an absolutely terrible thing."
The ATO sent thousands of Australians notices late last year alerting them, or
their tax agents, that they have historical tax debts, causing many people like
Ms Carrington confusion and distress.
Ms Carrington had to investigate how the debt came about, and after some
research learned that all those years ago, her ex-husband was placing income
into a trust under her name.
She says while she did not physically receive income from that trust account,
its existence created a debt under her name.
Complicating all this is the fact that she didn't become aware of the debt until
it had gone from being 'invisible' to visible on her myGov account.
In 2015, the ATO deemed the 2008 debt – which at the time was about $15,000 — as
"uneconomical to pursue".
And in 2016, her accountant told her this debt had been effectively written off
and she didn't need to worry about it.
Adriana Carrington has been left with a debt worth tens of thousands of dollars
that's been rescurrected by the ATO. (ABC News: Nassim Khadem)
While the debt still theoretically exists, typically the ATO doesn't pursue
debts that are deemed "uneconomical to pursue" because it's more costly for the
agency to chase them down than to write them off.
But, last year, the ATO resurrected Ms Carrington's debt, along with alleged
debts belonging to thousands of other Australians.
The fact that it was "uneconomical to pursue" and then reinstated, now appears
as a one line reference on her myGov account.
These debts had effectively disappeared and then reappeared many years later,
along with hefty interest charges.
The ATO has said it was owed more than $15 billion from 1.8 million entities,
largely consisting of individuals, but that this figure could be higher once
interest is applied to those debts.
It did not say how much higher, but Ms Carrington has so far been hit with
interest charges amounting to double the value of the original debt, and the
claimed debt is now $34,000 and still growing.
Watch
Duration: 3 minutes 14 seconds3m 14s
Taxpayers at risk of bankruptcy after ATO resurrects debts
'WHIFF OF ROBODEBT'
Some have likened the situation to the controversial Centrelink Robodebt scheme
that chased welfare recipients for money the agency claimed they owed but was
later found by a royal commission into the scheme to be seriously flawed.
Although, in many of the Robodebt cases, the welfare recipients targeted had not
actually been overpaid, and never owed the government any money at all.
Ms Carrington calls it "Robotax".
"It's been really hard — mentally, really hard," she says.
The ATO has rejected Ms Carrington's requests to waive the debt, which she says
could financially cripple her and cause her to lose her home. She wants the
federal government to intervene.
"I'm already 55 years old — I've only got a certain amount of working time left
and I have no superannuation that I can draw on," she says.
"When I left my husband (in 2012), I had a three-page bad credit list. I
couldn't get a home into my own name. I have fought and worked and saved for all
these years to finally be able to put a home in my name after having my
(previous) house repossessed from the bank.
"That's a huge thing for me. Now the tax office wants to take my family home."
Independent MP Andrew Wilkie also says the federal government should consider
waiving debts in some cases where the debts are too small, too old, and not the
fault of the taxpayer.
Independent MP Andrew Wilkie wants the government to waive debts in some
cases. (AAP: Luka Coch)
"There's more than a whiff of Robodebt," Mr Wilkie says.
"Surely there's a point where something is totally lost in history, particularly
if it's a small amount of money.
"The ATO should consider waiving a debt in extreme circumstances … when these
debts have been almost lost in history, when they haven't appeared in (peoples)
online accounts, and taxpayers have lost visibility of these debts, they
shouldn't then just out of the blue get a threatening letter saying that the
money will be taken out of their next tax return."
Some tax advisers are also frustrated with the ATO and are calling on the
government to intervene.
Gail Freeman runs a small accounting firm in Canberra and represents taxpayers
who are being pursued for old debts worth as little as a few cents and one who
is now deceased.
Gail Freeman says the debts are as small as 5 cents and questions why the ATO
would resurrect debts that small. (ABC News: Ian Cutmore)
She says the law needs to be changed to waive these old debts, and that the ATO
needs to better communicate with taxpayers when debts arise.
Ms Freeman received notice in October last year of the tiny amounts the ATO now
wants to recoup individually from 20 of her clients.
"There were a couple of five cents, a couple of 55 cents, one at 33 cents, and
the biggest one was just over $1,000," she says.
"And they were all really, really old. Most of them were from 2010 or earlier.
She says the client with the biggest debt, of just over $1,000, is no longer
alive.
"It's really difficult when people are deceased going back to their heirs and
successors and saying, 'Well, there's a debt that you didn't know about, which
the tax office are trying to recover.'"
Ms Freeman says while the amounts are small in the case of her clients, it is
still "a very distressing situation", and she's had to hold off telling some of
them as she tries to negotiate with the ATO and resolve the issue on their
behalf.
"People are hurting, businesses are struggling … and to suddenly say, 'Hey,
mate, you've got a debt from 14 years ago, which the ATO wants to recover', is
just adding insult to injury," she says.
"Fourteen years ago, if you'd asked them for $542, it may not have been an
issue. Now, if they've retired and they're living on limited pensions, it can
make a huge difference.
"It's just not a good look and it's not nice."
GOVERNMENT URGED TO CHANGE THE LAW
Ms Freeman hopes the federal government will step in and change the law so that
the ATO can waive these small debts. And she's calling on the ATO to improve its
communication with taxpayers to avoid the situation ever repeating.
She says the next time the ATO decides to write something off as 'uneconomic to
pursue', people need to know there's a possibility that debt could be
resurrected if not paid.
"Be transparent, be timely, let people know what you're doing," she advises.
Associate Professor Ann Kayis-Kumar is the founding director of UNSW's Tax and
Business Advisory Clinic, which provides free tax and business advice for people
in financial distress.
Ann Kayis-Kumar says the law needs to be changed to recognise some people with
serious hardship that should have their debts waived.(ABC News: John Gunn)
She says they have had about 10 clients approach them about this issue and
they've had to work with the ATO to clear taxpayer debts. One client's debt had
$29,000 worth of interest and penalties levied over more than a decade taking
the total debt to $37,000.
"It can be very distressing for clients who've had long-term on-hold debts," she
says.
"The sense of anxiety and fear and helplessness is quite profound.
"When it comes to economic stability, particularly in the post-COVID cost of
living crisis, it can have a tipping point on a client."
She says, for those taxpayers in hardship that cannot get an outcome internally
with the ATO, there needs to be a law change and that's up to the federal
government.
While laws exist in other countries, such as the United States, that ensure
people in serious hardship can have their debts waived, Dr Kayis-Kumar says
Australia's laws are outdated.
"In circumstances where that taxpayer will never be able to pay that debt off it
really does represent a legitimate question of whether the best approach is to
genuinely release that debt," she adds.
ATO IS STILL CHARGING INTEREST ON DEBTS DATING BACK YEARS
The ATO's outgoing commissioner Chris Jordan said in a recent speech at the
National Press Club that the agency had not handled its communications with
taxpayers well.
But he also made clear the agency had been told it has no discretion under the
law to waive these amounts and that it's now a matter for the federal government
to decide whether to waive certain debts.
Chris Jordan says the ATO does not have the authority to waive the debts that
were resurrected. (AAP: Mick Tsikas)
Rather than apply penalties, the ATO is trying to recover many of the debts by
waiting for the taxpayer to get a credit in their tax return and then offsetting
any debt against that credit.
The ATO says about 69,000 taxpayers with debts totalling $274 million fall into
this category.
The problem for other taxpayers is that, until the debt is paid, interest
generally still applies, and in some cases, penalties may too.
The ATO has indicated to ABC News its willingness to waive interest charges on
certain debts.
A spokeswoman said that the agency is reviewing whether there's a case to stop
pursuing taxpayers with debts pre-2017, but "no decision has yet been made
regarding the outcome of this review".
The spokeswoman said taxpayers can apply to the ATO to seek waiving of general
interest charges applied on debts, but that the ATO would only "consider these
requests on a case-by-case basis".
"The ATO also understands that in making these debts invisible to clients once
they were placed on hold, it does come as a surprise to many that they have
amounts outstanding, and improvements to the visibility of these debts via our
online services are in progress," the spokeswoman added.
The agency called on taxpayers impacted to reach out to the ATO to discuss
payment plans or other options for those facing financial hardship.
"It was never our intention to cause frustration or concern," the ATO
spokeswoman said.
"It's important to us that taxpayers have trust in our tax system and our
records."
A spokeswoman for Assistant Treasurer Stephen Jones said the minister is looking
into the issue and "the government is deeply concerned about the way this was
communicated and the stress caused to those who received the letters".
He said the ATO was reviewing its approach with taxpayers and the government
would wait for the agency's findings "before we commit to any action".
Posted 13 Mar 202413 Mar 2024Wed 13 Mar 2024 at 9:21am, updated 13 Mar 202413
Mar 2024Wed 13 Mar 2024 at 10:00pm
Share
* Copy link
* Facebook
* X (formerly Twitter)
*
RELATED STORIES
* 'I WOULDN'T HAVE SOLD OUR FAMILY HOME': HELEN LOST EVERYTHING FIGHTING THE
ATO. A BILL OF RIGHTS MAY HAVE SAVED HER
* ATO'S DEBT RECOVERY ACTION AGAINST SMALL BUSINESSES IS 'CRIPPLING', SAYS
OMBUDSMAN
* GOVERNMENT URGED TO DROP PROSECUTIONS AGAINST RICHARD BOYLE, DAVID MCBRIDE
AND BERNARD COLLAERY
* REVIEW INTO ATO'S DEBT COLLECTION TACTICS FINDS THERE WAS 'NO CASH GRAB'
More on:
* Accounting and Auditing Services
* Australia
* Business and Industry Regulation
* Business, Economics and Finance
* Consumer Finance
* Consumer Protection
* Federal Government
* Personal Taxes
* Small Business
* Tax
* Tax Evasion
TOP STORIES
* 'GLOBAL DASHBOARD FLASHING RED': FORMER BRITISH PM'S STARK WARNING OF
IMPENDING CONFLICT
* NETSTRATA MANAGING DIRECTOR STANDS ASIDE FROM PEAK BODY AFTER ABC
INVESTIGATION
*
Analysis by Brett Worthington
HONEYMOON'S OVER FOR PENNY WONG, LITERALLY, AS A TRUMP-SIZED ICEBERG
THREATENS THE HMAS ALBANESE
* MAJOR REPORT ON LGBT DISCRIMINATION IN SCHOOLS PROMPTS ANGER FROM FAITH
GROUPS, GOVERNMENT RESPONSE UNCLEAR
* TROUBLE WOLFING DOWN A CURRY WAS JAMES VALENTINE'S FIRST CLUE SOMETHING WAS
WRONG. IN A FEW WEEKS, HIS OESOPHAGUS WILL BE REMOVED
* live
SAINTS HAVE WINLESS PIES ON THE ROPES AFTER SICKENING COLLISION KNOCKS OUT
STAR WINGER
* live
PANTHERS DOMINATE UNDERMANNED BRONCOS AFTER CLEARY MASTERCLASS
* FIRST PATIENT OF ELON MUSK'S BRAIN CHIP IMPLANT SHOWN PLAYING ONLINE CHESS
WITH HIS MIND
* MELBOURNE MAN ON TRIAL FOR EXIT TRAFFICKING AFTER ALLEGEDLY LEAVING WIFE
STRANDED OVERSEAS WITHOUT PASSPORT
* FATHER KILLED BY SNAKE BITE AT CHILDCARE CENTRE WAS 'DOING HIS VERY BEST TO
KEEP THE CHILDREN SAFE'
* REFUGEE ADVOCATES MAKE CONTACT WITH GROUP WHO LANDED IN WESTERN AUSTRALIA'S
FAR NORTH
* DISGRACED BASKETBALLER TINY PINDER SENTENCED TO EIGHT YEARS' JAIL, VISA
CANCELLED OVER SEXUAL ASSAULTS
*
Analysis by Gareth Hutchens
WHY THE GOVERNMENT WANTS YOU TO BE THINKING BEYOND THE HEADLINE UNEMPLOYMENT
RATE
* AUSTRALIANS FEAR MOVING FROM WHERE THEY LIVE DUE TO CLIMATE DISASTERS
*
Analysis by Bang Xiao
FORGET ABOUT POLITICS, CHINESE FOREIGN MINISTER WANG YI IS IN AUSTRALIA FOR
BUSINESS
POPULAR NOW
Don't miss news that matters to you. Log in to ABC today to get a more
personalised experience tailored to your preferences.
GET STARTED
1.
'GLOBAL DASHBOARD FLASHING RED': FORMER BRITISH PM'S STARK WARNING OF IMPENDING
CONFLICT
2.
TROUBLE WOLFING DOWN A CURRY WAS JAMES VALENTINE'S FIRST CLUE SOMETHING WAS
WRONG. IN A FEW WEEKS, HIS OESOPHAGUS WILL BE REMOVED
3.
Analysis by Brett Worthington
ANALYSIS:HONEYMOON'S OVER FOR PENNY WONG, LITERALLY, AS A TRUMP-SIZED ICEBERG
THREATENS THE HMAS ALBANESE
4.
MELBOURNE MAN ON TRIAL FOR EXIT TRAFFICKING AFTER ALLEGEDLY LEAVING WIFE
STRANDED OVERSEAS WITHOUT PASSPORT
5.
FIRST PATIENT OF ELON MUSK'S BRAIN CHIP IMPLANT SHOWN PLAYING ONLINE CHESS WITH
HIS MIND
6.
FATHER KILLED BY SNAKE BITE AT CHILDCARE CENTRE WAS 'DOING HIS VERY BEST TO KEEP
THE CHILDREN SAFE'
TOP STORIES
1. 'GLOBAL DASHBOARD FLASHING RED': FORMER BRITISH PM'S STARK WARNING OF
IMPENDING CONFLICT
2. NETSTRATA MANAGING DIRECTOR STANDS ASIDE FROM PEAK BODY AFTER ABC
INVESTIGATION
3.
Analysis by Brett Worthington
HONEYMOON'S OVER FOR PENNY WONG, LITERALLY, AS A TRUMP-SIZED ICEBERG
THREATENS THE HMAS ALBANESE
4. MAJOR REPORT ON LGBT DISCRIMINATION IN SCHOOLS PROMPTS ANGER FROM FAITH
GROUPS, GOVERNMENT RESPONSE UNCLEAR
5. TROUBLE WOLFING DOWN A CURRY WAS JAMES VALENTINE'S FIRST CLUE SOMETHING WAS
WRONG. IN A FEW WEEKS, HIS OESOPHAGUS WILL BE REMOVED
JUST IN
* SMASHING ALANA KING CAMEO SETS UP AUSTRALIA ODI WIN AGAINST BANGLADESH
23m ago23 minutes agoThu 21 Mar 2024 at 12:22am
* STEVE EDGINGTON RESIGNS AS NT'S SHADOW DV MINISTER FOLLOWING REPORTS OF
BUSINESS TIES, STAFFER SUSPENSION
27m ago27 minutes agoThu 21 Mar 2024 at 12:18am
* BIDEN ADMINISTRATION ISSUES NEW RULES AIMED AT CUTTING VEHICLE CARBON
EMISSIONS, BOOSTING EV SALES
1h ago1 hours agoWed 20 Mar 2024 at 11:34pm
* FIRST PATIENT OF ELON MUSK'S BRAIN CHIP IMPLANT SHOWN PLAYING ONLINE CHESS
WITH HIS MIND
1h ago1 hours agoWed 20 Mar 2024 at 11:06pm
More Just In
Back to top
FOOTER
ABC News homepage
More From ABC NEWS
We acknowledge Aboriginal and Torres Strait Islander peoples as the First
Australians and Traditional Custodians of the lands where we live, learn, and
work.
SECTIONS
* ABC NEWS
* Just In
* Watch Live
* Politics
* World
* Business
* Analysis
* Sport
* Science
* Health
* Entertainment
* Lifestyle
* Fact Check
* Other
NEWS IN LANGUAGE
* 中文
* Berita Bahasa Indonesia
* Tok Pisin
CONNECT WITH ABC NEWS
* Facebook
* Instagram
* YouTube
* Apple News
* X (formerly Twitter)
MORE FROM ABC NEWS
* Contact ABC NEWS
This service may include material from Agence France-Presse (AFP), APTN,
Reuters, AAP, CNN and the BBC World Service which is copyright and cannot be
reproduced.
AEST = Australian Eastern Standard Time which is 10 hours ahead of GMT
(Greenwich Mean Time)
* Editorial Policies
* Accessibility
* Help
* Contact Us
* About the ABC
* Privacy Policy
* Terms of Use
* © 2024 ABC
*
*
*
*
MORE FROM ABC
Close menuABC
iviewListen
* ABC Home
* News
* Local
* listen
* iview
* Everyday
* More
EDITORIAL POLICIES
Read our editorial guiding principles
* Accessibility
* Help
* Contact Us
* About the ABC
* Privacy Policy
* Terms of Use
* © 2024 ABC
*
*
*
*