Massive 127 per cent surge in complaints against the ATO
Complaints against the Australian Taxation Office have risen 127 per cent in the past year, according to newly-released data from the Tax Ombudsman.
In the financial year to date, a total of 2989 have been made via the ombudsman’s office, with 80 per cent of those complaints coming from unrepresented individuals acting on their own behalf.
Debt issues remain the most common reason people complain, making up 23 per cent of total complaints, and centre largely on the issuing of penalty notices and the manner they are pursued.
Tax Ombudsman Ruth Owen’s snapshot report shows that in some cases, the ATO had failed to consider individual circumstances, which led to too many unfair outcomes.
“In the year to date, we’ve received a massive 127 per cent increase in complaints, mostly related to debt collection, penalties, and tax debt interest and payments,” Ms Owen said.
“This can largely be attributed to the Australian Tax Office’s increased focus on debt collection but also our efforts to raise community awareness of our service and how we can help taxpayers receive fair outcomes.
“Our data helps us to identify pain points in the tax system and determine matters that may warrant our further investigation.
“In 31 per cent of complaints about penalties and interest, we helped to achieve tax debt reductions or remittance (removal) of interest for our customers.”
Tax Ombudsman Ruth Owen says new data gives her office great insights into people’s dealing with the tax system. Photo: Tax Ombudsman website.
The Tax Ombudsman has released her first complaints data snapshot, showing the dramatic rise in complaints in recent months and highlighting debt complaints as the most significant topic of taxpayer concern.
The snapshot was developed to communicate complaints insights to the community and it gives the ombudsman a clear picture of the emerging themes – who is complaining, what they are complaining about, and the causes and outcomes.
Only 2 per cent of complaints so far this financial year have come from the ACT, while 32 per event have come from New South Wales, 26 per cent from Victoria, and 20 per cent from Queensland.
Western Australia has contributed 10 per cent to the complaints tally so far, South Australia 7 per cent, Tasmania 2 per cent, and the Northern Territory 1 per cent.
All figures are rounded in the report, and there were 1.5 per cent of cases from overseas.
“Our data also shows that giving our customers reassurance about the way the ATO has handled their matter can be just as important as receiving a positive outcome,” Ms Owen said.
“In 22 per cent of penalties and interest complaints, we could provide our customers with an independent review and assurance that proper process has been followed.
“By tracking our data closely, we can predict trends, anticipate problem areas, and push for change. The more we utilise our data, the more people we can help and ensure a fairer tax system for all.”
The report shows that in 67 per cent of complaint cases, the ATO’s actions were found to be reasonable.
“These insights show that complaints are not just about individual disputes,” the report states.
“They reveal where people struggle to navigate the tax system, where communication breaks down, and where rigid application of the law can cause real hardship.
“Understanding these patterns helps inform improvements to administration, decision-making and policy settings, supporting a fairer and more accessible tax system for all.”
The Tax Ombudsman will now release a complaints data snapshot quarterly.
How the ATO manages interest charges was the subject of a recent review the ombudsman published in March this year, in which it recommended improvements in how the ATO considers removing interest charges where taxpayers are trying to pay their debts.
That review found the ATO’s inconsistent decision-making, vague guidance and poor communication were leading to confusion and unfair outcomes for taxpayers seeking a remittance (reduction or refund) of the interest charges accumulating on tax debts.
The ombudsman made four recommendations in the review, including the ATO agree an up-front interest-free payment plan for eligible taxpayers who enter into and maintain complaint payment plans, to help get them back on track and discharge the debt faster.
The ATO agreed to all review recommendations.
