ATO Services
ATO Penalty Remission
The ATO imposes penalties for late lodgement, failure to lodge, and tax shortfalls. In many cases these penalties can be reduced or remitted entirely if the right grounds are established. A tax lawyer can assess whether you qualify and prepare a remission request.
⚠ Penalties accrue interest and escalate over time. The sooner a remission request is lodged, the sooner the accumulation stops — act now.
Does This Sound Like You?
Common situations we help with.
You've received a large failure-to-lodge penalty
The ATO has imposed a penalty for one or more returns lodged late or not lodged at all. The penalty may have grown significantly with interest and you want to know whether it can be reduced or written off entirely.
You couldn't comply due to illness, disaster, or hardship
Serious illness, a natural disaster, financial crisis, or another event genuinely prevented you from meeting your tax obligations on time. These are recognised grounds for penalty remission and a well-documented request can make a substantial difference.
The ATO imposed a shortfall penalty after an audit
Following a review or audit, the ATO has identified a tax shortfall and applied a penalty — ranging from 25% (carelessness) to 75% (intentional disregard). You believe the penalty rate is too high for the actual conduct involved, or that the penalty should be remitted.
You relied on incorrect advice from the ATO or a tax agent
You followed advice from the ATO or your accountant that turned out to be wrong, resulting in non-compliance. Where you acted in good faith on advice that was later found to be incorrect, there are recognised grounds for penalty remission.
The penalty has accumulated to a level that is disproportionate
The original failure was minor — a small shortfall or a single missed lodgement — but through the addition of GIC the total now owed is vastly disproportionate to the underlying conduct. Proportionality is a factor the ATO considers in remission decisions.
The ATO has already refused your remission request
You applied for remission yourself and the ATO declined. The refusal may be reviewable internally or through the AAT. If your original request was poorly prepared or missed important grounds, a stronger application may achieve a different outcome.
How It Works
Reduce ATO penalties with the right remission request.
Describe the penalties imposed and the circumstances that led to them. A tax lawyer will assess the available grounds and prepare a remission request to the ATO.
Submit Your RequestSubmit your request
Provide details of the penalties, the tax years involved, and the circumstances that contributed to the non-compliance.
Grounds assessed
A tax lawyer identifies the strongest remission grounds and advises on the likely outcome.
Remission request prepared
A written remission request is prepared and submitted to the ATO. If refused, review options are discussed.
Up to 75%
Maximum shortfall penalty rate — remission can substantially reduce or eliminate the penalty depending on the circumstances
All 8 States
ATO penalty remission specialists matched across every Australian state and territory
Free
Initial consultation — understand whether your penalty can be remitted before committing to anything
Many Reduced
A well-prepared remission request supported by the right evidence and legal grounds regularly achieves significant penalty reductions
Before You Apply
Practical questions about ATO penalty remission.
What is the difference between a shortfall penalty and a failure-to-lodge penalty? +
A failure-to-lodge penalty applies when returns or statements are not lodged by the due date — it accrues at a fixed rate per day or penalty unit. A shortfall penalty applies where the tax you reported is less than what the ATO determines you owe — the penalty rate ranges from 25% (carelessness) to 75% (intentional disregard). Different remission grounds and processes apply to each type.
Does lodging outstanding returns reduce penalties automatically? +
Lodging outstanding returns stops further failure-to-lodge penalties from accruing, but does not automatically remit penalties already imposed. You still need to separately apply for remission of existing penalties. However, getting returns up to date before applying for remission demonstrates good faith and can strengthen the remission grounds.
Can penalties be remitted if I was relying on my accountant? +
Reliance on a registered tax agent can be a mitigating factor — particularly for shortfall penalties — if you provided correct information to the agent and they made the error. It is not an automatic defence, but a well-presented remission request showing you acted in good faith and in reliance on professional advice can achieve a significant reduction.
How long does the ATO take to decide a remission request? +
There is no fixed statutory timeframe for penalty remission decisions — the ATO aims to process requests within 28 days, but complex cases or those requiring escalation can take longer. GIC continues to accrue on unpaid penalties while the request is being considered, which is another reason to apply as early as possible.
Can I dispute a shortfall penalty separately from the underlying assessment? +
Yes — penalties can be disputed separately. Even if you accept the underlying assessment, you may have grounds to dispute the penalty rate applied or seek remission. Conversely, if you successfully dispute the assessment and the shortfall is reduced, the associated penalty should also reduce proportionally.
What happens if I enter a payment plan — do penalties still apply? +
A payment plan addresses the debt, but does not remit penalties already imposed or stop GIC from accruing on the outstanding balance. A remission request and a payment arrangement are separate processes — both may be appropriate and should ideally be pursued together for the best financial outcome.
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