Review: Australian Taxation Office use of garnishee notices
Reviews and reports
The Inspector-General of Taxation and Taxation Ombudsman commenced this review to maintain community confidence in the administration of the tax system after serious allegations were made about the Australian Taxation Office’s (ATO) inappropriate use of
garnishee notices on small businesses. These allegations
were made by both a current and former ATO officer on the
Australian Broadcasting Corporation’s (ABC) Four Corners
program on 9 April 2018. We investigated allegations that the ATO:
- gave directions to staff to issue enduring garnishee
notices in every case as a ‘cash grab’ towards the end of the
2016–17 financial year; and - set targets for staff and assessed their performance
based on the level of debt collected.
Garnishee notices allow the ATO to recover taxpayer debts from third parties such as banks or trade debtors. If use inappropriately they can severely affect a taxpayer’s cash flow; in particular, the more vulnerable, such as small businesses and individuals.
In our view, the allegations that there was an ATO direction for a ‘cash grab’ on small businesses or that debt staff’s personal performance were set on amounts collected are not sustained on the evidence.