ATO tax debts, like all debts, are legally enforceable obligations. The ATO collects these debts on behalf of the Australian Federal Government.
If taxpayers don’t pay the amounts they owe to the ATO on time:
- They will be charged interest on the unpaid amounts.
- Will be contacted after the due date either by SMS messages in myGov, letters or phone.
- Have any future refunds or credits withheld to repay the amounts owed.
- Have selected debts referred to external collection agencies for collection on their
- Be subject to stronger action if they are unwilling to work with the ATO to address the debt or repeatedly default on agreed payment plans. This includes issuing a garnishee notice, director penalty notices, or starting insolvency proceedings.
- Be subject to legal action to recover outstanding tax and super debts. The action the ATO takes depends on whether the debt is owed by an individual (or sole trader), partnership, trust, superannuation fund or company, and may include claims or summons, bankruptcy notice, creditor’s petition, statutory demand or wind-up action.