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IGT to investigate ATO’s use of Garnishee Notices

IGT to investigate ATO’s use of Garnishee Notices

Jacquie McGrath and Peter Yoong discuss the IGT's review of ATO use of garnishee notices to recover tax debts.

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Following recent media attention, the Inspector-General of Taxation (IGT) on Wednesday announced that his office would be reviewing the Australian Taxation Office's (ATO) use of garnishee notices to recover tax debts. The preamble to the IGT’s published terms of reference notes the recent allegations that the ATO had inappropriately used its powers to collect debts and the impact, in particular, on small business.

The IGT’s terms of reference indicate that the review will focus on the following key areas:

  • The ATO’s strategies to manage tax debts by way of garnishee notices
  • The ATO’s existing policies and procedures about garnishee notices
  • Mechanisms to ensure ATO officer adherence to such policies and procedures
  • The use of key performance indicators (KPI) for ATO officers regarding debt collection
  • Specific communication to ATO officers about the use of garnishee notices and associated KPIs.

The IGT has previously reviewed the ATO’s debt collection practices in a 2015 review entitled ‘Debt Collection’. The report following that review observed that the majority of the garnishee notices were issued to individuals and small business taxpayers.

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