Jenny: resolving an erroneous DPN

Jenny was issued a Director Penalty Notice (DPN) for $41,000, even though she had no connection to the company involved. She first became aware of the issue when lodging her tax return, after credits were automatically offset against the alleged debt.

Jenny promptly lodged a DPN defence. She was able to show that she was unrelated to the entity and that the issue arose because her tax file number matched the company’s CAN, which was an ATO error.

The ATO withdrew the DPN. However, the withdrawal letter stated that a new DPN could still be issued in the future, which caused Jenny significant anxiety. At the same time, there was a delay in the offset credit being refunded and the DPN accounts continued to appear in her ATO Online account.

Jenny made an initial complaint to the ATO. While this resolved the credit issue, it did not address the ongoing visibility of the DPN accounts or the wording of the withdrawal letter. Jenny then escalated the matter to the Tax Ombudsman, seeking assurance that a new DPN would not be raised and that the DPN roles would be removed from her account.

The ATO initially declined, citing record‑keeping requirements. We issued an Initial View, arguing that it was unfair for Jenny to continue to be affected by an ATO error. The ATO agreed to remove the accounts from view and issued an apology confirming that a DPN would not be raised again.

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.