The Australian Taxation Office is pursuing a new batch of taxpayers over decades-old debts, drawing comparisons to its widely criticised and suspended “robotax” initiative.
One taxpayer was recently pursued over a supposed debt of a few thousand dollars from 2006, which only appeared on his online tax portal this year, and was followed up by several phone calls demanding payment.
“I’ve had six months of fairly aggressive pressure put on me with no proof, and I’d be willing to bet I’m not alone,” said the taxpayer, whose details were verified but who asked for his name not to be published.
“This action they’re undertaking is unreasonably heavy-handed and unfair, not to mention psychologically unsettling given the burden of proof is bizarrely on the taxpayer who, most likely, no longer has documents to refute any of the ATO’s claims.”
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Others have expressed their frustration on public noticeboards, including on the ATO’s community platform, where one taxpayer claimed they had $4,000 taken from a refund for an unknown debt that is more than six years old. Guardian Australia could not verify their details.
Such debts, which are often impossible to contest given they predate the five-year retention period most taxpayers are required to keep records, closely resemble those targeted by the ATO’s 2023 scheme designed to raise more than $15bn.
Dubbed “robotax”, the initiative drew comparisons to the flawed robodebt compliance program that relied on automated processes. The contested debts, described by the ATO as “on-hold”, had remained invisible to taxpayers for years.
Amid a public backlash, the 2023 scheme was suspended for debts put on hold prior to 2017, and is awaiting a legislative fix after the Labor government proposed putting those old debts permanently on ice.
Like the suspended program, the new initiative has targeted amounts linked to old business activity statements, GST payments and PAYG instalments.
The ATO commissioner, Rob Heferen, said earlier this year the agency needed to do more to recoup the $50bn in outstanding collectible debt, which he described as mostly self-reported by taxpayers.
New tax scheme
Tax officials can put debts on hold for years until they believe it is cost-effective to pursue them, which is when a taxpayer would start receiving notifications to pay.
The sole trader interviewed by Guardian Australia said his alleged 2006 debt suddenly appeared on his online tax portal earlier this year, shortly before he started receiving calls by ATO staff.
“The thing I find most frustrating is not knowing whether I’m going to receive telephone calls in the future saying that there’s a new debt,” said the person, who successfully contested the amount.
“They’re kind of free to do whatever they want, and then the burden of proof is on the taxpayer to refute that.”
An ATO spokesperson said the agency launched a new initiative in August to start “progressively including debts that were previously placed on hold in account balances”.
This means some taxpayers have started seeing debts on their online portals from years past, although the amounts may have been accrued unknowingly and could be contested.
“This is part of our continued efforts to improve visibility and help taxpayers understand their tax position fully,” the ATO spokesperson said.
The spokesperson said the agency was “not currently including debts placed on hold that may be impacted by the proposed law change”, referring to the suspended scheme.
It’s unclear why the ATO would have targeted a debt allegedly accrued in 2006, given these were the sorts of debts suspended in the 2023 initiative that were widely criticised, including by the tax ombudsman.
An ATO spokesperson declined to clarify.
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