Tax Ombudsman Call for Clearer, Kinder ATO letters

If you've ever opened a letter from the ATO and felt confused (or slighlty anxious), you're not alone. A recent review by the Tax Ombudsman (formerly known as the Inspector-general of taxation and Taxation Ombudsman (IGTO)) has found that the ATo's high volume letter could use a serious refresh in clarity and tone.

According to the Tax Ombudsman Ruth Owen, the ATO has a responsibility to communicate in ways that make it easy for taxpayers to understand their obligation and any actions they need to take. Each year, the ATO sends moer than 140 million letters and messages to Australians, investigating significant taxpayer-funded resources into developing and distributing them.

The review examined how the ATO designs and tests its letters, including some of the most complex ones. The findings?

• The quality and clarity of the ATO's letters vary greatly

• Many letters are written from the ATO's perspective, focusing on what iti wants to say , than than what the taxpayer needs to understand.

• The ATO often assumes readers have strong tax knowledge and English proficiency, which isnt always the case.

The review also highlighted the ATO's letters can sometimes lack empathy, using langauge that feels guilt inducing, even when no wrongdoing has occured. In addition, the letter could do more to support culturally and linguistically diverse taxpayers, First Nations people and people with disbailities.

There were also issues with letters being sent to the wrong recipient, a clear reminder of how important it is for the ATO to respect communication preferences and ensure correspondence goes to the correct taxpayer or their tax agent.

To address these issues, the Tax Ombudsman has made several key recommendations, including:

• Reviewing how letters are written and designed, involving people with strong communication skills and audience awareness

• Updating templates to better support diverse audiences.

• Testing letters with a wide range of taxpayers and professionals to ensure clarity and purpose.

• Applying taxpayer and tax agent communication preferences consistently across all templates.

The ATO has responded positively, saying:

“We accept all recommendations outlined in the report and agree they will help us move to the next level of managing our communications.”

At Addition Accounting, we see this as a welcome step forward. Clear, empathetic communication from the ATO helps everyone (especially small business owners) better understand their obligations and avoid unnecessary stress.

If you ever receive a letter from the ATO and aren’t sure what it means (or how to respond), please don’t hesitate to reach out. We’re here to help you interpret the message, take the right next steps, and stay confident in your compliance.