Key Highlights

  • Complaints increased 74% to 2,376 in the six months to September.
  • Ruth Owen expects complaints to keep rising for another 12 months.
  • Reductions or remissions occurred in 5% of complaint cases, down from 17%.
  • Unrepresented individuals accounted for 82% of complainants.

Complaints about the Australian Taxation Office are rising fast, and the Tax Ombudsman does not expect that to stop soon. Ruth Owen's latest report records 2,376 complaints in the six months to September, up 74% on a year earlier. She expects numbers to keep climbing for another 12 months. With tax bills for many self-lodgers due around 21 November, how the ATO collects debts is now a pressing question for many households.

A 74% jump in six months

The Tax Ombudsman's Complaints Insights Report, covering April to September 2026 and dated 27 October, shows 2,376 complaints. That compares with 1,362 in the same period a year earlier, an increase of about 74%.

Most complaints come from ordinary taxpayers rather than businesses or their advisers. The report says 82% of complainants were unrepresented individuals.

Payments to taxpayers, Debt collection and penalties and interest are the biggest issues. By investigations, payments to taxpayers and debt collection each accounted for 19%, and penalties and interest for 18%.

The Tax Ombudsman, previously known as the Inspector-General of Taxation and Taxation Ombudsman, investigates complaints about the ATO and the Tax Practitioners Board free of charge. It also runs broader systemic reviews, and released a draft work plan for those reviews for consultation on 31 August.

The complaint figures sit alongside a firmer ATO approach to collecting overdue tax. Debt collection now ranks equal first among the issues the Ombudsman investigates, which helps explain why the office is focusing on fairness for people who owe money.

"Isn't fair and reasonable": the Ombudsman's warning

Ms Owen has been unusually direct about how the ATO treats people who owe tax. She said: "I sometimes see that the way they treat people who are owing tax isn't fair and reasonable."

According to the Tax Ombudsman, the ATO was found to have acted reasonably in 63% of debt-related complaints, down 9 percentage points. Ms Owen plans to publish trend reports every six months and expects complaints to keep rising for the next 12 months.

That is a forecast, not a certainty. But it suggests the watchdog sees the current rise as more than a short-term spike linked to tax time. Regular six-monthly reports should also make it easier to track whether the ATO's handling of debt cases improves.

Penalties and interest: fewer reductions

One of the clearest changes is in outcomes for people seeking relief from penalties and interest. Penalties or interest were reduced or remitted in 5% of cases, down from 17%.

More than three-quarters of penalty and interest complaints concerned the general interest charge (GIC). The GIC is the interest the ATO charges on overdue tax debts. It compounds daily, and its rate is updated each quarter.

The Ombudsman has raised GIC before. In March 2026 it called for fairer relief from the interest charge.

The report also shows a rise in complaints about penalties for failing to lodge a return. These now make up 11% of penalty and interest complaints, up 7 percentage points. Some taxpayers said they had relied on their tax agent's advice.

Hypothetical example: how interest builds on an unpaid bill

Hypothetical example: Sam has a $10,000 tax debt that remains unpaid for 180 days. For illustration only, assume an annual GIC rate of 11%, compounding daily. The actual rate is set by the ATO each quarter and may differ.

Daily compounding at 11% a year over 180 days adds about $557 in interest. Sam's debt would grow to about $10,557.

If the ATO agreed to remit part of the interest, the amount owed would fall. The report's figures suggest that kind of relief has become less common in complaints reaching the Ombudsman, with reductions or remissions in 5% of cases, down from 17%.

The example shows why early contact with the ATO and payment plans can matter. Interest keeps building while a debt is unpaid, even during a dispute.

Refunds, expedited action and tax time

Not all complaints are about debt. Some 37% of payment complaints concerned the status of tax refunds, up 1 percentage point. Expedited action by the ATO, where the Ombudsman asks the agency to move quickly on an urgent case, featured in 14% of payment complaints, up from 4%.

The timing of the report matters. The ATO said in October that bills for self-preparers are "generally due 21 November". This year, 21 November falls on a Saturday. Taxpayers can check their notice of assessment for the exact due date.

The ATO also warned that failure-to-lodge penalties can reach $1,820. It said about 2 million self-preparers had not yet lodged when it had received about 9 million returns on 19 October.

Payment Options are also changing. The ATO will keep accepting Credit cards until 30 June 2027, under a joint ministerial release dated 9 October. After that, cards can still be used through third-party providers. Just over 2% of individuals paid by credit card in 2024–25. The government has also asked the ATO to consult on hardship support for people who cannot pay by other methods.

Tax Commissioner Rob Heferen told Senate estimates that "hindsight's a wonderful thing" when asked about the credit card decision. "I think we'd be more active in trying to engage with people earlier," he said.

What to watch

The Ombudsman's next six-monthly trend report should show whether complaints keep rising. On Ms Owen's own forecast, the increase may continue into late 2027.

Tax bills for many self-preparers are generally due around 21 November. Taxpayers with a debt they cannot pay in full may wish to contact the ATO early about a payment plan, which can reduce the risk of escalating collection action.

The ATO consultation on hardship support and alternative payment arrangements is under way, ahead of the 30 June 2027 end to direct credit card payments.

The Mid-Year Economic and Fiscal Outlook is due in December. It will update the government's Revenue estimates for 2026–27.

Taxpayers who are unhappy with how the ATO has handled their matter can usually complain to the ATO first, then take the matter to the Tax Ombudsman if it is not resolved.