Review: ATO’s administration of Director Penalty Notices

Scheduled to begin September 2026 – TBC

Reviews and reports

Director Penalty Notices (DPNs) are an important tool for the ATO to administer and collect certain company tax debts – GST, PAYGW and superannuation guarantee – directly from directors of companies. However, their use can have significant impacts on individual taxpayers, not all of whom are aware of their personal liabilities as a director.

In the 2024-25 financial year, the ATO issued more than 84,000 DPNs to directors of approximately 64,000 companies, a 136% increase over the prior financial year, as part of the strengthening of its debt collection functions.

Although DPNs are an important tool to ensure that directors who allow their companies to fall into debt are not able to escape liability, their use can also cause serious consequences. This is especially the case where directors have ceased their directorships or been unaware of the liabilities due to personal circumstances, such as illness, which may have prevented their active involvement in the management of the company.

An increasing area of concern is how coerced directorships are being used to perpetrate financial abuse, with DPN liabilities being a further impact on victim-survivors. Drawing on our body of complaints regarding DPNs as well as stakeholder feedback and the ATO’s ongoing work in relation to its vulnerability framework and debt strategy, this review would explore how the ATO uses and administers DPNs and any opportunities to improve its approach.

Review: ATO’s management of compromised accounts

Scheduled to begin in 2026

Reviews and reports

In April 2024, the Tax Ombudsman published a report of our examination of one aspect of tax identity fraud. That investigation and report focused on the importance of bank account integrity and the ATO’s risk management controls to prevent fraudsters from changing bank account details in legitimate taxpayer accounts. That aspect of the tax identity fraud investigation has been concluded and the ATO’s response to our recommendations has been published online.

Another key aspect of tax identity fraud is the experience of taxpayers (and their representatives) when their tax account is compromised. Feedback from the community and practitioners indicate that affected individuals face significant difficulties. These include challenges in recovering tax refunds lost to fraud and in accessing their tax accounts via myGov or the ATO app, which often requires long wait times on phone calls to unblock. Accordingly, this review will seek to investigate whether the ATO’s management of compromised tax accounts are consistent with the principles of good administration, such as ease of access, low cost of compliance and putting it right.

What will we examine?

  • Whether the ATO provides timely and adequate support to taxpayers and their representatives in assisting them to secure and restore their online tax account.
  • Whether the ATO’s policies and processes for supporting taxpayers who have tax debts or have lost their tax refunds due to compromised tax accounts are reasonable and proportionate to the risks.
  • Whether the ATO’s current processes to prevent future occurrences of compromise are effective and sustainable.
  • Opportunities for the ATO to improve its collaboration with other agencies to strengthen coordinated responses and treatment strategies for identity fraud cases, ensuring timely resolution and support for affected individuals.