The Australian Taxation Office (ATO) has intensified efforts to address overdue tax returns, actively contacting taxpayers to remind them of their obligations. Reports indicate that individuals, particularly those with an Australian Business Number (ABN), have been receiving phone calls and voicemails urging them to lodge overdue returns and explain their delays.
Why the ATO Is Contacting Taxpayers
According to Jenny Theodore, founder of Eire Consulting, the ATO has ramped up engagement with taxpayers who missed the October 31 deadline for the previous tax year. These calls have primarily targeted individuals with ABNs, who often owe taxes at the end of the financial year rather than having them withheld through a Tax File Number (TFN).
The ATO’s focus on ABN holders stems from the likelihood of outstanding tax debts. Tax agent Theodore explained, “With a TFN, tax is withheld from your salary when you are paid. With an ABN, you’re generally responsible for paying tax after the income is earned.”
Penalties for Overdue Tax Returns
Failure to lodge a tax return can result in penalties and interest charges. The failure to lodge penalty accrues at $330 for every 28-day period the return is late, up to a maximum of $1,650. Additionally, the general interest charge (GIC), currently set at an annual rate of 11.42%, applies to unpaid tax debts. These charges can compound, significantly increasing the amount owed.
What to Do If You Receive a Call from the ATO
For those contacted by the ATO, Theodore recommends cooperating and providing updates on your efforts to resolve overdue obligations. She advises taxpayers to:
- Explain the reasons for the delay, such as financial constraints.
- Assure the ATO that steps are being taken, either through self-lodgment or via a tax agent.
- Consider negotiating a payment plan to address any tax debt gradually, noting that interest charges will still apply.
“The ATO just wants an update on what action you’re taking,” Theodore said. Proactively engaging with the ATO can help reduce penalties and avoid further complications.
Identifying Legitimate ATO Calls
With scams becoming increasingly prevalent, distinguishing legitimate ATO calls from fraudulent ones is crucial. The ATO confirms that legitimate calls:
- Come from a private number or appear as “No Caller ID.”
- Do not ask for sensitive information such as Tax File Numbers, birth dates, or passwords.
- Do not include hyperlinks, QR codes, or threats of arrest in emails or SMS messages.
If in doubt, taxpayers can verify the authenticity of a call by contacting the ATO directly at 1800 008 540.
Consequences of Ignoring the ATO
Ignoring ATO communications can result in escalating penalties and interest. Theodore emphasizes the importance of addressing overdue returns promptly, even if financial difficulties exist. Setting up a payment plan allows taxpayers to manage their debt while avoiding additional penalties for non-lodgment.