Tax complaints almost triple in just two years
Complaints to the tax office watchdog have soared by 74 per cent over the past year as ordinary workers and small businesses struggle with the ATO’s crackdown on outstanding tax bills and penalties.
Tax Ombudsman Ruth Owen, in a report released today, said there had been sharp increases in grievances from taxpayers over the financial hardship caused by the ATO’s calculation of debts and its actions to recover outstanding payments.
In the period between April and September, the ombudsman received 2376 complaints, compared to 1362 for the same period last year. The 2026 numbers were 180 per cent up 2024 levels.
In one case noted by Owen, a woman left with paraplegia after an accident was caught in a dispute with the ATO over an outstanding $160,000 tax debt. After an ombudsman investigation which found the tax office had failed to take into account the woman’s dire health and financial circumstances, the debt was waived.
According to Owen, it was clear many taxpayers were under pressure which was exacerbated by the tax office’s actions.
“We continue to see an unprecedented demand for our services. Our latest complaint data shows more people are struggling due to the ATO’s debt collection activity or interest charges,” she said.
“At a time when many Australians are facing financial distress, we are seeing increased complaints about how the ATO is collecting tax debt owed and how interest is applied to the debt, often making the amount due impossible to pay back.”
Of the issues raised with the ombudsman, debt collection and payments to taxpayers accounted for 19 per cent each. Another 18 per cent related to penalties including the interest penalties on outstanding tax.
Unpaid superannuation was one of the fastest growing areas of concern with an 8 per cent lift on 2025 levels. Super accounted for 56 per cent of all payment complaints, while another 37 per cent related to the status of tax refunds.
In a sign of the economic pressure on taxpayers, the number of complaints from people wanting to be released from a tax debt because of serious financial hardship climbed 5 per cent on last year.
There was also a sharp increase in the proportion of complaints about how tax debts had been calculated and in re-raising debts that had previously not been pursued by the ATO.
There was a 9 per cent drop in the number of complaints where the ombudsman confirmed the ATO’s actions were reasonable and a 6 percentage point lift in cases where concerns about the tax office’s communications had been raised.
More than 80 per cent of complaints came from individuals, which included people operating as a business. While 12 per cent of complaints were from organisations, small businesses accounted for 29 per cent of the ombudsman’s complex cases.
Last week, credit bureau CreditorWatch noted a surge in the number of businesses falling behind on their payments to the ATO.
Tax debt defaults reached more than 37,500 in September, a 20.7 per cent jump over the year.
Owen said the increase in complaints was being partly driven by the financial pressure on individuals and businesses.
“The concentration of complaints we’re seeing around tax debt, interest, missing superannuation and delayed refunds indicates people are doing it tough at the moment. But they’re still trying to do the right thing and engage with the tax system.”
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