ATO CRACKDOWN

At O’Brien Palmer, one of the most frequent questions we’re asked by clients, accountants, and legal advisors is:
“Why is the ATO being so aggressive right now?”

It’s a valid question – and one we take seriously. We’re seeing a steep escalation in tax enforcement activity, and it’s putting serious pressure on businesses, especially those already dealing with financial distress.

Understanding the why behind the crackdown is essential if you want to protect yourself, your business, or your clients. Here’s what’s really happening – and what you need to know.

The Tax Debt Problem: A Record $105 Billion

In a recent address at the UNSW ATAX International Conference on Tax, Commissioner of Taxation Rob Heferen revealed that the ATO’s debt book has blown out to over $105 billion — the largest it has ever been.

Of that, $46.4 billion is considered collectable debt, nearly double what it was in 2019. And only a small number of taxpayers are responsible for a significant chunk of it.

“Just under half of that $105.1 billion is collectable debt,” said Commissioner Heferen.
“And 22,000 taxpayers alone are responsible for $11 billion – that’s 1% of debtors holding 20% of the debt.”

These are the businesses and individuals the ATO is now actively targeting.

Why the ATO Is Stepping Up Collection Activity

This isn’t just about recouping revenue. It’s about perceived fairness, enforcement, and confidence in the tax system.

“This approach we are taking is deliberate and targeted,” said Heferen.
“We’re focusing on those who refuse to engage, ignore repeated reminders, and continue to avoid their obligations.”

He also made it clear: the ATO is now prepared to deploy its full powers, including Director Penalty Notices (DPNs), garnishee notices, legal proceedings, and in some cases, winding up companies.

And we’re already seeing the impact.

Who Is Most at Risk Right Now?

The ATO has stated that priorities include:

• Unpaid superannuation guarantee

• Outstanding PAYG withholding

• GST collected from customers but not remitted

• Taxpayers showing consistent non-compliant behaviour

For directors, these liabilities can become personal – especially when it comes to late-lodged BAS or superannuation. (If you haven’t already seen our DPN video series, we highly recommend watching it below).

Is It All Doom and Gloom? Not Necessarily.

Despite the size of the debt, the ATO maintains a 92.5% effective tax collection rate when compliance is factored in — which speaks to the overall health of Australia’s tax system. But they are clearly focusing on the outliers.

“The vast majority of Australians are doing the right thing,” Heferen said.
“But for the small group who are not, we are acting more urgently.”

What You Should Do Next

At OBP, we know how stressful this environment is, and we’re here to help. Whether you’re:

• Behind on tax or super

• Worried about personal liability

• Trying to support a client under pressure

• Or simply unsure of where you stand

The worst thing you can do is delay or ignore ATO correspondence.

We can work with you and your advisor to develop a clear strategy, communicate with the ATO, and protect your position.

Final Word: Get Trusted Advice, Not Risky Shortcuts

We’re also seeing a disturbing rise in poor advice being given by unqualified parties – particularly around company restructures and phoenix activity. As we’ve said before, ignorance is not a defence. The ATO is watching closely.

If you’re unsure, please reach out. Our team at O’Brien Palmer is here to help you understand your options and stay ahead of the risk.

📞 Call us on 1300 545 133
📧 Email: obp1@obp.com.au
🌐 Visit: obp.com.au