Why Accountants Need to Partner with Tax Debt Specialists

In my 11 years of experience as a tax debt negotiator, I’ve seen firsthand how complex and stressful ATO enforcement actions can be for businesses. As accountants, you’re often the first point of contact for your clients when tax debt issues arise. While you’re experts in financials, tax advice and and tax compliance, tax debt is a different beast altogether.

Tax debt, especially with the ATO’s enforcement ramping up, requires specialist knowledge and a strategic approach. It’s often not enough to simply offer advice on basic compliance or payment schedules. Engaging a tax debt specialist can make a huge difference in both resolution and client relationships.

Here’s why I believe it’s crucial for accountants to involve tax debt specialists and how it can lead to better outcomes for everyone involved.

The Growing Threat of ATO Enforcement

With over $60 billion in unpaid tax across Australian businesses, the ATO’s enforcement efforts are ramping up. Garnishee orders, director penalty notices (DPNs), and other aggressive collection actions are becoming increasingly common. For instance, I’ve helped clients avoid garnishee orders, where the ATO intercepts their bank accounts directly, causing immediate cash flow disruptions. If your clients owe significant tax debt, the consequences are severe: penalties, asset loss, or even personal liability in many cases.

Here’s the thing: just because you’ve dealt with the ATO before doesn’t mean it’s the same game anymore. The ATO has fundamentally changed its approach in the last 18 months. What might have worked in the past is no longer enough to protect businesses (and their owners) from severe enforcement actions. One of my clients, for example, faced an unexpected DPN after a routine audit, despite having paid their taxes in the past. Without the intervention of a tax debt specialist, they could have faced serious consequences.

I’ve seen firsthand how tax debt can quickly spiral out of control. The stress it creates can undermine an entire operation. As accountants, you’re already managing complex tasks on behalf of your clients, but tax debt has evolved. The landscape is now more complex than ever, and the ATO’s approach demands a level of expertise that goes beyond traditional accounting.

At Tax Assure, we know that 95% of businesses can—and should—be working toward a payment outcome with the ATO. This is why it’s essential for accountants to guide their clients toward proactive solutions, rather than assuming the worst. Failing to engage a tax debt specialist can escalate manageable issues into disastrous ones or unnecessarily push businesses toward insolvency when viable options are available.

Why Tax Debt Management Requires More than Just Accounting

When it comes to managing tax debt, the stakes are high, and the complexities of working with the ATO and its various enforcement levers are often underestimated. Accountants excel at tax lodgements, financial reports, and ensuring compliance, but managing tax debt requires expertise beyond what many have been trained to handle. It involves navigating complex ATO procedures, negotiating repayment terms, and protecting clients from escalating legal enforcement actions and penalties.

For example, negotiating a manageable payment plan with the ATO requires an in-depth understanding of their processes and an ability to present a client’s financial situation in the best possible light. When one of our clients, a small business owner, found themselves drowning in unpaid PAYG withholding, we were able to negotiate a tailored repayment schedule that fit their cash flow, preventing further enforcement action. Without this intervention, they would have faced an immediate garnishee order and DPN.

The Risk of Escalation

Failing to act swiftly and strategically can cause a tax debt issue to escalate from a manageable situation to a financial disaster. From personal liability for business owners to legal action that can harm long-term business operations, the impact of ignoring tax debt is real. Take, for instance, a case where a client ignored an initial payment plan and failed to act on a DPN. They ended up with their personal assets at risk and their business facing liquidation.

It’s a challenge that demands the expertise of a tax debt specialist—someone who knows how to handle ATO communication, negotiate repayment terms, and protect businesses, and their directors, from further harm.

Why You Should Be Engaging Tax Debt Specialists

• Expert Negotiation with the ATO
  Tax debt specialists have a deep understanding of the ATO’s processes, penalties, and repayment programs. They’re not just tax debt advisors—they are negotiators who know how to work with the ATO to achieve the best possible outcome for businesses. For instance, we’ve been able to help clients achieve reduced penalties and interest charges and extended repayment terms—something that can be difficult to manage without expertise.
  
  
• Protecting Client Relationships
  Involving a tax debt specialist shows your commitment to resolving the issue and protecting the client’s best interests. It builds trust and strengthens the relationship. Clients feel supported when they know their accountant is proactively looking out for their financial well-being. In contrast, attempting to manage the tax debt situation ‘in-house’ can put both the clients business as well as an accountants goodwill and client relationship at risk.
  
  
• Maximising Efficiency
  By bringing in a tax debt specialist, you can offload the heavy lifting, allowing you and your staff to maintain your focus on high-value client services. For example, one of our accountant partners was able to focus on helping their clients grow their business, while we handled the complex tax debt negotiations, allowing them to save time and increase their revenue potential.
  
  
• Minimising Risk for Clients
  Tax debt specialists are experts at mitigating risks, such as personal liability and the issuing of Director Penalty Notices (DPNs). We’ve seen firsthand how addressing issues early can save clients from personal financial ruin.
  
  

When Should You Involve a Tax Debt Specialist?

Recognising the signs that you need to bring in a specialist is crucial. Here are a few indicators:

• ATO Enforcement Actions: If your client receives a ‘red letter’, or worse, threatened or actual legal recovery action – credit bureau reporting, DPN, garnishee order, or statutory demand, it’s time to call in a specialist.  The earlier we can engage with the ATO the better the outcome for, and lesser the damage to, the client and their business.
  
  
• Unrealistic Payment Plans: When the ATO’s proposed repayment terms are unmanageable for your client, a specialist can step in to renegotiate.
  
  
• Rising Penalties: If your client is facing escalating interest charges and penalties due to non-compliance or unpaid debts, you need a specialist who can help reduce that burden.
  
  
• Business Disruption: If the tax debt is starting to interfere with your client’s day-to-day operations, it’s time to act. Tax debt specialists can help resolve the issue without harming the business further.
  
  
• Client Request: Sometimes, clients will specifically ask for expert help with their tax debt issues. In such cases, a referral to a specialist is the right call.
  
  

How to Choose the Right Tax Debt Specialist

Look for a specialist who has a proven track record of successfully resolving tax debt issues, is highly knowledgeable, and offers tailored solutions. The best specialists will be transparent about their process and have a history of positive outcomes with the ATO.  

It is also imperative that the tax debt specialist is appropriately qualified and also registered with the TPB to carry out this work.

Takeaway

In my experience, tax debt doesn’t have to be the final straw for a business. When accountants and tax debt specialists work together, the outcome is usually better than when either tries to go it alone. Tax debt management is now a complex and crucial part of your clients’ financial health and, in this current environment, survival. By engaging a specialist, you’ll not only resolve the debt problem but strengthen your professional relationships, protect your clients, and safeguard their businesses from further harm.

If you’re dealing with clients facing tax debt, don’t hesitate to reach out to a trusted tax debt specialist. Your clients—and their businesses—will thank you for it.