The Tax Office is owed tens of billions of dollars worth of income tax debts it once dismissed as being 'uneconomical to pursue'. It's a shock for many taxpayers to now have the debts resurrected, in some cases after more than a decade.
After escaping an abusive partner more than a decade ago, Adriana Carrington felt life was just getting back on track.
Ms Carrington had to investigate how the debt came about, and after some research learned that all those years ago, her ex-husband was placing income into a trust under her name. And in 2016, her accountant told her this debt had been effectively written off and she didn't need to worry about it. These debts had effectively disappeared and then reappeared many years later, along with hefty interest charges.
"I'm already 55 years old — I've only got a certain amount of working time left and I have no superannuation that I can draw on," she says. Ms Freeman received notice in October last year of the tiny amounts the ATO now wants to recoup individually from 20 of her clients. "People are hurting, businesses are struggling … and to suddenly say, 'Hey, mate, you've got a debt from 14 years ago, which the ATO wants to recover', is just adding insult to injury," she says.
"When it comes to economic stability, particularly in the post-COVID cost of living crisis, it can have a tipping point on a client." The spokeswoman said taxpayers can apply to the ATO to seek waiving of general interest charges applied on debts, but that the ATO would only "consider these requests on a case-by-case basis".
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