Tax complaints almost triple in two years as watchdog flags ATO debt pressure

Ombudsman links rising caseload to ATO debt collection, interest charges and hardship

By LineZotpaper AI staff

Published27 October 2026

Read Time3 min

Sources3 outlets

A report released today by Tax Ombudsman Ruth Owen shows complaints to the tax watchdog soared 74 per cent over the past year, with many taxpayers and small businesses struggling because of the Australian Taxation Office's debt collection and interest charges.

In the period from April to September, the ombudsman received 2376 complaints, up from 1362 in the same period last year, an increase of 180 per cent on 2024 levels.

Owen said there had been sharp increases in grievances from taxpayers over financial hardship caused by the ATO's calculation of debts and its actions to recover outstanding payments. "We continue to see an unprecedented demand for our services," 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."

Debt collection and payments to taxpayers each accounted for 19 per cent of complaints, with another 18 per cent relating to penalties, including interest on outstanding tax. Unpaid superannuation was among the fastest growing concerns, up 8 per cent on 2025 levels, and accounted for 56 per cent of payment complaints. Another 37 per cent related to the status of tax refunds.

Complaints from people seeking release from a debt because of serious financial hardship rose 5 per cent. The share of complaints in which the ombudsman confirmed the ATO's actions were reasonable fell 9 per cent, while concerns about the ATO's communications rose 6 percentage points. More than 80 per cent of complaints came from individuals, and small businesses accounted for 29 per cent of the ombudsman's complex cases.

Owen said the increase in complaints was partly driven by 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."

Last week, credit bureau CreditorWatch noted a surge in businesses falling behind on their payments to the ATO, with tax debt defaults reaching more than 37,500 in September, a 20.7 per cent jump over the year.

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Analysis

Why This Matters

The surge in complaints signals financial distress among individual taxpayers and small businesses, who make up most of the ombudsman's caseload.
The report puts the ATO's debt collection, interest and penalty practices under scrutiny at a time when many Australians are under financial pressure.
Future reports will show whether complaint volumes keep rising and whether the ATO changes how it calculates and recovers debts.

Background

The Tax Ombudsman is an independent watchdog that investigates complaints about the Australian Taxation Office. Its latest report covers how the ATO calculates debts, recovers outstanding payments, applies interest and penalties, and handles refunds and superannuation.

Key Perspectives

Tax Ombudsman Ruth Owen: says demand for the ombudsman's services is "unprecedented" and that more people are struggling due to the ATO's debt collection activity or interest charges, which can make amounts "impossible to pay back."
CreditorWatch: the credit bureau recently noted a surge in businesses falling behind on their payments to the ATO, with tax debt defaults above 37,500 in September.

What to Watch

Whether complaint numbers continue to climb when the ombudsman next reports.
Whether the ATO adjusts how it calculates tax debts or applies interest after the ombudsman's findings.
The trend in business tax debt defaults, which CreditorWatch put at more than 37,500 in September.

Sources

Tax complaints almost triple in just two years · WAtoday
Tax complaints almost triple in just two years · The Sydney Morning Herald
Tax complaints almost triple in just two years · Brisbane Times

Checked

12 claims in this story checked against 1 source: 10 supported.

Show each claim

SupportedTax complaints almost tripled in two years.WA Today - Latest News: “Tax complaints almost triple in just two years.”
SupportedThe watchdog flagged pressure linked to ATO debt collection.WA Today - Latest News: “ordinary workers and small businesses struggle with the ATO’s crackdown on outstanding tax bills and penalties.”
SupportedThe ombudsman linked rising complaints to ATO debt collection, interest charges and hardship.WA Today - Latest News: “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.”
SupportedComplaints rose 74 per cent over the past year.WA Today - Latest News: “Complaints to the tax office watchdog have soared by 74 per cent over the past year”
SupportedOwen said, “We continue to see an unprecedented demand for our services.”WA Today - Latest News: ““We continue to see an unprecedented demand for our services.”
SupportedOwen said complaints about ATO collection and interest could make debts impossible to repay.WA Today - Latest News: ““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.””
SupportedThe ombudsman received 2,376 complaints from April to September, compared with 1,362 in the same period the year before.WA Today - Latest News: “In the period between April and September, the ombudsman received 2376 complaints, compared to 1362 for the same period last year.”
SupportedThe complaints figure was 180 per cent above 2024 levels.WA Today - Latest News: “The 2026 numbers were 180 per cent up 2024 levels.”
SupportedOwen said the complaint concentration showed people were struggling but still engaging with the tax system.WA Today - Latest News: ““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.””
Partly supportedThe share of complaints in which the ombudsman confirmed the ATO acted reasonably fell 9 per cent.WA Today - Latest News: “There was a 9 per cent drop in the number of complaints where the ombudsman confirmed the ATO’s actions were reasonable”
Partly supportedMore than 80 per cent of complaints came from individuals.WA Today - Latest News: “More than 80 per cent of complaints came from individuals, which included people operating as a business.”
SupportedTax debt defaults reached more than 37,500 in September, up 20.7 per cent over the year.WA Today - Latest News: “Tax debt defaults reached more than 37,500 in September, a 20.7 per cent jump over the year.”