Letters from the Australian Taxation Office (ATO) are sometimes an unwelcome delivery, but the information they contain is often important, detailed and time sensitive. In recent years, the ATO has worked hard to make its communications clearer, but the quality and clarity of ATO communications is still a major area of concern in complaints and feedback received by the Inspector-General of Taxation and the Taxation Ombudsman (IGTO).   

To address this, the IGTO is undertaking a review into the ATO’s drafting processes to see how messages are prepared, how decisions are made, whether feedback is taken on board, and if the ATO can improve its messaging to help more people understand their tax obligations.  

“Some ATO messages are very clear and straightforward but some are really confusing, especially when they’re unexpected or come at a time of financial stress,” says Ruth Owen, Inspector-General of Taxation and the Taxation Ombudsman. “Feedback suggests that ATO’s letters can cause a high degree of anxiety for taxpayers. The worst place for any confusion is in a letter from the ATO telling you something is wrong or that you have to pay more tax at a time when you are already feeling anxious or distressed.”   

Ruth believes that anxious or confused readers are most likely to either ignore or throw the letters in the ‘too hard basket’, which might mean more interest charges and other penalties, making things worse. Alternatively, taxpayers do their best to try and work them out either directly with the ATO or through their tax agent, which ends up costing everyone time, money and frustration.  

“Most people don’t want to spend a lot of time on their tax. They need letters in straightforward language, without jargon, which makes it easy to understand what to do next. Poor communications and confusion can damage trust over time. People are less likely to lodge and pay their taxes on time this year if they don’t trust the process or don’t understand what is being asked of them,” Ms Owen says.  

The review will track a small sample of the ATO’s letters, including some of the most complained about, starting with their first draft right through to whether recipients understood the letter and took the action needed. Readability, accessibility, clarity, tone and style will all come under the microscope to see how messages can be made clearer.  

“Learning lessons from where the ATO’s letters don’t hit the mark will help them improve the processes for all their letters in the future and hopefully make tax a bit simpler for every Australian to understand,” says Ms Owen.