A complainant approached the IGTO to raise concern that the ATO was pursuing him for an amount of taxation debt through a Director Penalty Notice (DPN) that was excessive. Directors are personally liable for some undischarged company debts, including superannuation guarantee charge (SGC). DPNs are used to recover the tax debts incurred by a company from its directors personally.  

Due to the complex technical nature of the matter, the complainant had sought to engage with the ATO over a lengthy period via multiple channels, including lodging an objection, appealing the matter to the Administrative Appeals Tribunal (AAT) and lodging a formal complaint with the ATO complaints team. However, throughout these processes, the ATO did not sufficiently address the complainant’s tax issue.  

The complainant had a large amount of information which he believed showed that the amounts sought to be recovered through the DPN was incorrect. However, as the company had been de-registered for a period of time, the complainant did not have authority to discuss or seek details about the company’s debts, including with the ATO. The IGTO commenced an investigation to ensure that the ATO had considered the information in the taxpayer’s possession and to confirm the amounts in the DPN were correct.  

As a result of the IGTO investigation, the ATO agreed to review the information in the complainant’s possession in the interests of fairness and transparency. Furthermore, through the course of the investigation, the ATO acknowledged that there were keying and other administrative errors in calculating the debts that were the subject of the DPN. Any changes to the underlying debts of the company would also correspondingly result in a reduction of the DPN debt. However, as the company had been de-registered, it was not possible to amend its accounts to reflect the reduced debt amounts in ATO systems.  

To remediate the situation, the ATO determined that it would be appropriate to support an application by the complainant to the Department of Finance for a waiver of debt.