Chartered Accountants Australia and New Zealand (CA ANZ) welcome the Tax Ombudsman’s findings from a review into the Australian Taxation Office’s (ATO) management of general interest charge (GIC) remission. This review, which followed CA ANZ’s submission, made 4 recommendations which address member concerns about the lack of guidance, inconsistent outcomes and the need for better explanations of decisions. The ATO has agreed with all the recommendations and will have an implementation plan which will be reported on a quarterly basis and published on the Tax Ombudsman website.

What the review found

The review supported members’ concerns and experiences, finding that inconsistent outcomes due to vague ATO guidance available to taxpayers and ATO staff resulted in 77% of decisions not complying with internal guidelines. Further  inconsistencies arose from:

• ATO officers not knowing what information was required to make a decision
• Related cases not being automatically detected
• The ATO having access to financial information that was unknown to the tax agent
• 92% of phone requests being successful compared to 76% of written requests

Contrary to member experience, approval rates for GIC remission were found to be similar between taxpayer-initiated requests and agent requests, as well as between taxpayer sizes.

“GIC remission is a significant source of frustration for our members and their clients. We consistently hear concerns about a lack of transparency and inconsistent decision‑making, compounded by a high, non‑deductible GIC rate and very limited avenues to seek a review of decisions. The changes being made by the ATO and the recommendations of the Tax Ombudsman could improve this situation”

“Chartered Accountants are trusted advisers and play an essential role in supporting voluntary compliance with Australia’s tax system. We welcome the Tax Ombudsman’s recommendations, which will help ensure our members can provide clear, reliable and practical advice to their clients regarding GIC remissions.”

What was recommended

Whilst the Tax Ombudsman was undertaking the review, the ATO was simultaneously progressing its own review of its treatment of GIC remissions. In January 2026, the ATO review resulted in the establishment of a centralised function to consider GIC remissions greater than $2,500 and the mandatory use of Online Services for Agents (OSfA) forms for registered tax agents. CA ANZ has  commentary on these changes - First steps toward greater consistency in GIC remissions. The Tax Ombudsman is supportive of these changes and is encouraging the ATO to further refine its approach to GIC remission and other debt collection issues.

The 4 recommendations from the Tax Ombudsman’s review are that the ATO:

• Conduct a post implementation review of the January 2026 GIC remission changes within 12 months
• Provide better training to ATO staff, consider greater use of partial remission and explore options for upfront agreement of full or partial GIC remission for a specific period when approving payment plans
• Improve consistency by further refining its guidance to ATO staff
• Improve the level of details in letters refusing GIC remission and the transparency of review options

Members will be particularly interested about the following suggestions to the ATO:

“it is in the interests of the fairness of the tax system to assist taxpayers where the application of interest causes tax debts [including those uneconomic to pursue] to grow beyond their capacity to pay where they are actively trying to repay their tax owed, especially if they have experienced factors outside of their control impacting their ability to pay”

“…agree to GIC remission up‑front (for a specified period) for taxpayers experiencing vulnerability or hardship who meet the criteria and enter into and maintain compliant payment plans. This might be for the full or part of the interest owed and should include the option to agree to future remission for the period of repayment (if compliance is maintained). This approach would effectively extend the existing interest‑free payment plan settings (currently restricted to small businesses) to other taxpayers experiencing vulnerability or hardship, ensuring GIC does not accumulate while taxpayers take reasonable steps to repay. This would discharge debts more quickly and get taxpayers back to ongoing compliance”

“the ATO should consider how partial remissions can be applied more flexibly to support engagement and voluntary compliance”

During the Tax Ombudsman’s review, the ATO updated how GIC remissions may be challenged. The report noted that “taxpayers may challenge the ATO’s remission decisions through these options:

1. submitting a new remission request detailing circumstances where they think the ATO has made an error, or where there is new information or evidence,
2. lodging a complaint, which may prompt a review of the original decision,
3. lodging a complaint with the Tax Ombudsman. After the ATO has reviewed its decision, we [i.e. the Tax Ombudsman] may conduct an independent investigation. However, if the ATO does not agree with our findings, we cannot overturn or substitute its decision
4. seek judicial review through the Federal Court or Federal Circuit and Family Court, which only examines procedural fairness.”

Whilst not explicitly calling legislative change, the Tax Ombudsman noted that GIC remission is a subjective process which makes the absence of a merits-based review a serious concern for procedural fairness. CA ANZ agrees and has been advocating for such decisions to be objected to rather than dealt with by the Federal Court.

Support for recommendations

CA ANZ supports the Tax Ombudsman’s key recommendations and has been working closely with the ATO to improve these and other debt collection processes. The ATO has indicated that it will be making a rolling sequence of additional changes and improvements across interest and failure to lodge (FTL) penalty remission, payment and lodgment deferrals and payment plans that will build on the interim changes already made

Please contact [email protected] if you have suggested improvements.