ATO director penalty powers in focus 

Media release. Tuesday, 1 September 2026.

When a company debt becomes personal it can be life changing 

A Tax Ombudsman review will examine whether the ATO’s use of Director Penalty Notices (DPNs) is striking the right balance between protecting public revenue and fair treatment of company directors. 

Tax Ombudsman Ruth Owen said DPNs were a compliance tool used by the ATO to recover selected tax debts from a company’s directors personally, with the ATO increasingly using them in recent years.  

“The ATO issued more than 84,000 DPNs in the 2024-25 financial year for unpaid taxes or superannuation charges – a 136% increase on the previous year,” Ms Owen said. 

The Tax Ombudsman said DPNs were an important tool for promoting director accountability and protecting public revenue and employee entitlements, but that they could also have serious consequences for individuals if not issued carefully and fairly. 

“Being a company director comes with some important responsibilities and personal liabilities. Many directors don’t fully understand this and can get caught with a very nasty surprise from the tax office.  My review will look at whether the ATO’s approach to issuing DPNs is fair, effective and supported by strong safeguards,” Ms Owen said. 

The Tax Ombudsman said the review built on feedback from the community and tax profession and follows a 2025 review into the identification and management of financial abuse within the tax system and broader government efforts to combat coerced directorships and financial abuse.  

“This review will also consider how the ATO responds to people in vulnerable circumstances including those unaware of the liabilities due to personal circumstances, illness, coerced directorships or financial abuse,” Ms Owen said. 

The Tax Ombudsman said the review would help identify where the system is working well and opportunities for improvement. “We will examine the ATO’s letters, guidance, decision-making process and follow-up action. We will also look at clarity of communication to directors before and after receiving a DPN.” 

Current and former company directors, tax professionals, financial counsellors, small business advisers and community organisations are encouraged to share their experiences with DPNs.  

“We appreciate any insights people can offer to help us understand how the system works in practice and where opportunities for improvement may be made to ensure fair, consistent and transparent administration of DPNs,” Ms Owen said. 

How to participate: attend a webinar on 10 September, 15 September or 16 September, complete a short survey, write to or phone us.  

Consultation is open until Tuesday, 29 September 2026.  
For more information or to contribute visit: Review: ATO’s administration of Director Penalty Notices. 

Media contact  

Emma Collien. Director, Communications.  

Phone: (02) 8239 2190. Email: [email protected]  

Have your say on future review topics 

We are also running a consultation process for our future work plan. We welcome feedback on the current topics we’re considering for systemic reviews or alternative suggestions. Access the proposed workplan and how you can contribute.