There are a lot of reasons why you may not have lodged old tax returns. Whatever the reason, it’s important not to let this scare you away from ever lodging them. It’s best to ‘fess up, get some help, and get them up to date.
The ATO is a lot less scary when you go to them first, rather than making them track you down. If they do have to track you down, then you could be charged with a criminal offence for not lodging or receive a default assessment and penalty.
Step One: Figure out where you stand
There are a couple of ways you can find out where you currently stand with the ATO.
The quickest way is to get in touch with a registered tax agent. A registered tax agent can look at your records on the tax agent portal, and immediately see if you have any unlodged returns from 2001 onwards.
Another option is to call the ATO on 13 28 61 and ask them whether you have any unlodged returns. Make sure you have your personal details with you when you call, such as:
- your tax file number
- either your bank account details or a reference number from previous ATO correspondence.
Step Two: Figure out what you need to do next
Now that you know what you haven’t lodged, you can work out what you need to lodge. It may be that you didn’t have to lodge a return in a particular year – for example if you didn’t earn any Australian income. The ATO has a tool to help you work out your lodgment requirements, or you can speak with your tax agent about it.
If it turns out that you don’t need to lodge a return, the ATO asks that you complete a non-lodgment advice. This is not mandatory, but it can be used by the ATO in deciding what sort of compliance action to take.
Step Three: Gather your information
If you have decided that you do need to lodge a return, then you should start gathering your information.
The best way to do this is to ask your registered agent for a pre-filling report. This a report that is compiled by the ATO from information it gathers from a whole range of places such as banks, employers and other government departments. This is a great way to start and takes a lot of the stress away from lodging your tax returns late.
Unfortunately, a pre-filling report is not a complete fix. You can only access these for the 2007 income years onwards, and there may be gaps in some of the information.
A pre-filling report also does not capture a lot of your deductions. Did you donate money to a charity? Did you use your car for work purposes? These deductions won’t be contained in the pre-filling report. Of course, you may decide to just let these deductions slide – you don’t have to claim every deduction to which you may be entitled, particularly if finding the records is a challenge.
Step Four: Get lodging!
Once you have your information together, you can lodge your returns. If you use a registered tax agent, they can do this for you using their electronic lodgment system.
Lodging your own return can take a bit longer and be a bit trickier. This is because the ATO’s online lodgment system for the general public has a cut-off date, which means there is a short window on how far back you can go using the software. Generally, you can only self-lodge paper returns for past years, which takes longer to process than an electronic return.
Step Five: Deal with the debt
If you’ve lodged late, you might find yourself owing the ATO not just the back taxes, but also interest on unpaid tax, or penalties for late lodgment. This is not the end of the story. There are always options for dealing with a tax debt.
Depending on the reasons for lodging your returns late, you may be able to get a remission of the interest and penalties that the ATO charge you. These amounts can be significant, so it is worth speaking to me to see if you can get a reduction.
In some situations, you may be also able to negotiate a complete release of the debt, or a payment plan to allow you to pay the debt over time. I can help you negotiate these options.
- Have you been issued a summons to attend Court for not lodging tax returns?
- How to ask the ATO for a remission of your general interest charge (or GIC)
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About Hartigan Law
I am a specialist tax disputes lawyer with over a decade of experience in dealing with the ATO.
I’ve helped many clients to deal with their tax debt and to negotiate reductions of their tax debts. I have also represented clients who have been prosecuted for not lodging tax returns.
In many cases, I can work with clients all over Australia (except for criminal prosecutions). I can do this because the tax issues I deal with are Federal – the tax law is the same no matter where in Australia you live.