Mei: protecting a survivor of financial abuse from unfair director penalties

Mei, a survivor of physical, emotional and financial abuse, was coerced by her former partner into becoming a director of a company shortly before he resigned. After leaving, he opened a bank account in the company’s name without her knowledge, carried out transactions that benefited him, and left the company owing tax debts.

The ATO was preparing to issue Director Penalty Notices (DPNs), which would have made Mei personally liable for debts she did not create. She lodged complaints with both the ATO and the Tax Ombudsman at the same time due to the seriousness of her situation, and both agencies agreed to progress the matter concurrently.

We initiated an expedited investigation, accessed relevant ATO records, and liaised directly with the ATO complaint manager. Further evidence was gathered from Mei and exchanged with the ATO.

We also guided Mei on practical steps, including approaching ASIC and the company’s bank to challenge the unauthorised directorship and bank account. Importantly, the ATO agreed to pause all recovery activity—including DPNs—while the matter was reviewed.

During the investigation, the ATO advised that the company had since been deregistered, meaning Mei was no longer a director and the ATO would have to re‑register the company to pursue any further action.

The ATO determined it would not pursue DPNs or recovery action at that time, and given the company’s deregistration, it is highly unlikely that enforcement action will occur in future. Although some details remain confidential, Mei gained reassurance that she would not be held responsible for her ex-partner’s actions. She expressed deep gratitude for the support and clear communication throughout the process.