Written

For

The

Australian

-

‘Deliberately

non-compliant’

taxpayers

brace

for

crackdown-

what

to

do

Would you owe the taxman half a million dollars if you were on his most wanted list? That's the eye-watering average tax debt of the 22,000 Australians the ATO now has firmly in its sights — a group responsible for a staggering $11 billion in unpaid tax.

The days of pandemic-era leniency are well and truly over. ATO commissioner Rob Heferen has made it clear: those who ignore reminders and refuse to engage can expect director penalty notices, garnishees and wind-up action. The taxman is done being patient.

But here's what I think is important to understand — the ATO isn't lumping everyone together. There's a clear distinction being drawn between genuinely vulnerable taxpayers and what the ATO calls the "deliberately non-compliant." Luke Star of Star & Associates put it well when he told me the crackdown is fair, because it's the 1 per cent of bad apples sitting on 20 per cent of the outstanding tax liabilities.

The bigger issue for many everyday Australians is how they end up in debt in the first place. In my experience, it's often after selling an investment property, shares or a business. The sale proceeds get spent on cars, renovations or holidays — and then tax time arrives with a nasty surprise. My tip: work out the estimated capital gains tax the moment you sell, and park that money somewhere untouchable.

Compounding the problem is the ATO's general interest charge, currently sitting at 11.36 per cent. That's personal loan territory, and it traps people in a cycle where the interest alone is crushing.

If you're already behind, the worst thing you can do is stick your head in the sand. The ATO will accommodate genuine hardship and set up payment plans — and interest can even be remitted at their discretion once the debt is cleared. But you have to pick up the phone. Because if you don't, they will.