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The Inspector-General of Taxation has announced the terms of reference in its investigation into the ATO’s alleged use of “cash-grab” garnishee notices.
IGT launches investigation into ATO garnishee notices
16 May 2018
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7 minute read
In an announcement today, IGT Ali Noroozi said he would be undertaking a review of the ATO’s debt recovery actions, following allegations made during an ABC Four Corners program.
“My investigation will examine the accuracy of the allegations made along with themes emerging from complaints to my office with the aim of finding improvements where necessary and restoring confidence in the system,” Mr Noroozi said.
The terms of reference for the investigation will include a focus on the ATO’s strategies to manage tax debts by way of garnishee notices; policies and procedures for issuing garnishee notices, including how the ATO considers circumstances of taxpayers such as vulnerable small businesses and individuals; and mechanisms to ensure staff adherence to its garnishee notice policies and procedures.
The review will also look at ATO Key Performance Indicators (KPI) with respect to both tax debt collection and staff performance; specific communications to staff regarding the use of garnishee notices and associated KPIs at each location of its debt recovery units; and other relevant concerns or potential improvements identified during the course of the review.
Mr Noroozi also noted that the debt-related complaints received by the IGT continues to form over 20 per cent of all complaints, with garnishee notices being amongst the top three issues raised, despite making 19 recommendations in relation to the ATO’s debt recovery approach during its 2015 review.
“The ATO has the vital task of collecting government revenue and recovery of tax debt is an important part of that task, however, it must be done equitably, taking into account the particular circumstances of each taxpayer whilst ensuring a level playing field is maintained,” said Mr Noroozi.
The ATO had previously vehemently opposed a culture of wrongdoing.
The IGT has urged accountants to lodge a submission to its review by setting out their or their clients’ experiences with the ATO’s use of garnishee notices and its impact on them by 22 June 2018.
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- I would like to see the ATO take it's debt collection back in house rather than outsource it to numerous debt collection agencies. All they do is expect us tax agents to chase our clients and they get the commission for doing nothing. When we were dealing directly with the ATO there was better communication and much less frustration.0
