Collecting unpaid tax

We are required to recover unpaid tax that has fallen due. To do this, we may need to gather a broad range of information, including details of:

  • your bank account and loan application details
  • financial arrangements and transactions (including overseas transactions)
  • business structures and their ownership and management
  • assets held and disposed of
  • monies owed to you.

Our approach to collecting a debt is generally guided by your past engagement with us. We also take your individual circumstances into account. If possible, we gather this information in cooperation with you or your representatives.

In some cases, we will use our notice powers to compel you, or a third party, to give the information to us – for example, where our cooperative approach has not worked, or third parties are subject to confidentiality arrangements.

We will usually notify you before making third-party enquiries about your debt. In some circumstances, we will not notify you, particularly when our collection activities could be compromised – for example, if we ask a financial institution about your account details so we can garnishee monies.

Tracing action

It is important for us to contact you to discuss collecting your debts, and where necessary commence action to recover the outstanding amounts. If we are unable to locate you, we may undertake a tracing action to find your new address. We are authorised to make relevant enquiries with the public at large in the administration of the tax laws to locate the address. The level of disclosure about your personal information is kept to a minimum when asking about you.

We may request information from various sources, including:

  • your neighbours, employers, business associates, friends, accountants and solicitors
  • trade organisations
  • industry associations
  • telecommunication service providers
  • Australia Post
  • Australian Securities & Investments Commission
  • financial institutions
  • super funds
  • other government agencies
  • local councils
  • Land Titles Office
  • State and Federal police and Corrective Services.

When making our enquiries, we will consider if we need to use our formal powers or whether we can gather the information using a cooperative approach. Given that the Privacy Act may apply to our third-party enquiries, we will usually only conduct these enquiries by issuing a formal notice.

Court proceedings

Once we have commenced legal proceedings to recover a debt, we generally will not use our formal powers to obtain information for those proceedings.

However, in certain high-risk cases, we may use our formal powers where litigation has commenced. For example:

  • information may be required to apply for a freezing order where summary judgment proceedings are in progress – that information would not be used to obtain judgment in the proceedings on foot, but rather to identify property against which a judgment in our favour may be satisfied
  • a formal notice may be issued for tracing action when court proceedings have commenced, particularly where we seek information upon which to obtain an order for substituted service.

For more about the enforcement measures we use for the collection and recovery of tax related liabilities and other amounts, refer to PS LA 2011/18 Enforcement measures used for the collection and recovery of tax-related liabilities and other amounts.

    Last modified: 26 Jul 2016QC 37592