The Australian Taxation Office fined a 97-year-old Brisbane woman $1,650 because she had not “prioritised her tax obligations”, despite the recent death of her husband who managed their financial affairs.
The decision was only overturned after her accountant posted details of the incident on LinkedIn – catching the attention of industry associations and the tax ombudsman, who issued a stinging rebuke direct to the ATO.
After a lifetime of submitting tax returns on time, the elderly Brisbane resident lost her husband in mid-2023, according to details provided to Guardian Australia by accountant Nathan Watt.
Her circumstances were further complicated by the sale of the tax practice formerly used by the couple.
Then, the 97-year-old was charged $1,650 for the late lodgement of her 2025 returns.
Watt detailed the extenuating circumstances to the ATO and asked for the charge to his client to be overturned.
The ATO’s response read: “Your remission has been considered, we’ve decided not to remit.”
“You have not prioritised your tax obligations. It is your responsibility to manage your affairs to ensure lodgment by the due date,” the response said.
“Remission would not be considered fair or reasonable when other taxpayers have taken steps to lodge on time.”
In his LinkedIn post, Watt said he wondered “how the person at the ATO who wrote this felt when they were doing it”.
The ombudsman, Ruth Owen, who oversees complaints against the ATO, said such decisions had become systemic.
“In too many circumstances that I see, they fail to see the human being behind the tax return,” Owen said.
“We then get examples like this where clearly this is an elderly person who’s been recently bereaved. They should start there.
Sign up for the Breaking News Australia email“It is really important that these things are raised as complaints because the ATO won’t learn unless people highlight the mistakes that they make.”
A report published by the ombudsman’s office in March found that the tax office routinely failed to account for personal circumstances when making decisions about penalties and interest charges on tax debts.
ATO apologises
The ATO has taken a hard-edged approach to debt collection in recent years amid concerns that some taxpayers were lodging returns late on the assumption they could get the penalty waived.
The agency said in 2023 that remission requests would only be considered in very limited circumstances.
Debt deemed by the ATO to be “collectible” doubled between 2019 and 2025, to more than $50bn.
The firm approach also meant that the ATO has failed to use discretion in a “fair and reasonable way”, according to the ombudsman.
An ATO spokesperson said the agency was improving how it supported taxpayers by “ensuring our approach reflects the expectations of the community”.
“The ATO acknowledges that in this instance our communication did cause unintended offence and we have both corrected the error and apologised for this communication,” the spokesperson said.
The $1,650 penalty has been reversed.
The ATO spokesperson declined to clarify how the initial decision came about, and whether it was made by an internal or outsourced worker.
The issue comes during a period of increased scrutiny on the tax office’s reliance on outsourced debt collectors and call centres, which have coincided with a rising number of complaints of a deteriorating service.
The ATO has referred hundreds of thousands of taxpayers to a private equity-backed debt collector, Recoveriescorp, in recent years, moving the sensitive practice outside the public service.
