Recent advertisements and reports in the media are claiming that the Australian Taxation Office (ATO) can take money from your account - without your knowledge or consent.
The widespread reaction to this media coverage is that many Australians are not aware of what powers the ATO has when it comes to securing assets and clearing debts.
As the ATO's principal purpose is to collect the majority of the Federal Government's revenue, it is one of the most powerful institutions in Australia. Their approach is to work with taxpayers and tax agents to ensure that all tax owed is paid. However, if taxpayers are unwilling to work with them, repeatedly default on an agreed payment plan, don't take steps to resolve the situation, or are believed to be a flight risk, the ATO can take action to ensure debts are paid.
In short, the ATO can absolutely take money out of your account without advising you - however, this will only occur in dire circumstances where a situation has been escalated many times.
Overall, the ATO is able to:
Issue a garnishee notice to someone holding money on your behalf - for example, the ATO can require your employer to pay a portion of your salary directly to them until your debt is paid.
Issue a director penalty notice - directors can personally incur penalties equal to their company's unpaid PAYG withholding liabilities or superannuation guarantee charge. If the debt is not paid, legal proceedings may commence.
Direction to pay super guarantee - if employers receive a direction to pay superannuation guarantee, any outstanding superannuation guarantee charge must be paid within the period specified. It is a criminal offence not to comply.
Impose a freezing order - the ATO can freeze and, if required, strip your accounts; particularly where they believe you have alternative sources of income that have not been disclosed. This cannot be initiated by the ATO alone, but must be granted by a court.
Issue writs or warrants of execution, or warrants of seizure and sale - the ATO can force you to sell certain assets to pay your tax debts.
Winding up - the ATO can commence winding up procedures, either liquidating your company, or bankrupting you. The ATO would argue that in many cases the wind up forces the inevitable and prevents further debt being incurred.
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