The ATO will tax you on their estimate of your income.

Unlodged returns

The ATO has announced that it’s having a crack-down and is beginning to issue ‘Default Assessment Warning’ letter to taxpayers who have overdue income tax returns.  Where the ATO has evidence that you have received taxable income in a year that you haven’t lodged a return, then you can expect to receive a letter.

Default Assessment

If the overdue returns are not lodged by the date specified in the letter, the ATO will issue ‘Default Assessments’ for each unlodged year based on their estimate of your taxable income.

If the ATO issues a “Default assessments”, you can be up for:

  • failure to lodge on time penalties. (usually $550 per return)
  • administrative penalties of 75% of their estimate of the tax you owe, (less any PAYG tax or other tax credits already paid to the ATO.)
  • administrative penalties may increase by 20% if your client has had a penalty previously applied for a Default Assessment.

What you need to do

Easy; bite the bullet, gather your records together, give us a ring and come and talk to us through what you have or haven’t got for the years in question.  We’ll prepare the return from what you know and what we can download from the ATO’s income databases.

These letters are part of the ATO’s ongoing programme to address non-lodgement, and they won’t go away.

They may owe you money

Here’s the funny thing.  When clients come to us and say that they haven’t lodged their returns for a few years, in 9 out of 10 cases they end up getting a big fat refund.  If the ATO hasn’t chased you yet, they probably owe you money.

Another good reason to get onto the job, dust off the paperwork and get your affairs in order.

If you’ve received a Default Assessment and want some help, or just want to bring everything up to date, call Noel or Amanda on (03) 9585 7555 or email

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