Submission: ATO’s administration of Director Penalty Notices

26/05/2026

The Tax Ombudsman has scheduled a review of the ATO’s administration of Director Penalty Notices [DPNs].

DPNs are an important tool for the ATO to administer and collect certain company tax debts directly from directors of companies. They ensure directors who allow their companies to fall into debt are not able to escape liability.

However, their use can have serious consequences for individual taxpayers, not all of whom are aware of their personal liabilities as a director. This is especially the case where directors have ceased their directorships or been unaware of their liabilities due to personal circumstances. Another area of concern is how coerced directorships are being used to perpetrate financial abuse, with DPN liabilities further impacting victim-survivors.

The Tax Ombudsman’s review will draw on their body of complaints regarding DPNs – as well as stakeholder feedback and the ATO’s ongoing work in relation to its vulnerability framework and debt strategy – to explore how the ATO uses and administers DPNs and any opportunities to improve its approach. ARITA will make a stakeholder submission when the feedback window commences.

In the 2024-25 financial year, as part of the strengthening of its debt collection functions, the ATO issued more than 84,000 DPNs to directors of approximately 64,000 companies, a 136% increase over the prior financial year.

Read more on the Tax Ombudsman website.

ARITA encourages members to contribute their own submission when the consultation period opens, or alternatively, they can share their feedback via the Tell ARITA feedback form and ARITA will make a submission on behalf of all members.