iscoverThe Tax Ombudsman is calling on the Tax Office to improve the clarity and tone of the letters it sends to taxpayers.
Tax Ombudsman slams ATO letters for lack of ‘clarity, tone, empathy’
21 July 2025
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9 minute read
Following its systemic review, the Taxation Ombudsman has found that improvements to the clarity and tone of the ATO’s taxpayer letters are crucial to avoid unnecessary confusion, stress, or anxiety.
As outlined in its systemic review plan, the Tax Ombudsman examined the ATO’s process for designing and testing high-volume letters, focusing on a sample of some of the most complex letters.
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Ruth Owen, the Tax Ombudsman, said many people found the ATO’s letters confusing and too technical, with a language and tone that often induced stress and anxiety.
“The release of this review report is especially timely given we’re at the start of tax time, when people are particularly focused on communications with the ATO,” she said.
“I think we’ve all received a letter from the ATO at some point and wondered what on earth it was about. The ATO has a responsibility to engage with taxpayers in ways that make it easy to understand their obligations and any actions they need to take.”
According to the Tax Ombudsman, the ATO sent more than 140 million letters and messages to Australians each year and invested considerable taxpayer-funded resources into developing and distributing them.
Upon her review, Owen said the ATO assumed all readers and recipients of its letters had good technical tax knowledge, proficiency in English, and understood the terms that were being used, which was often not the case.
It was also noted that the letters “lacked empathy” for the readers and recipients in some circumstances, as well as not always being delivered to the intended recipient.
An example of this surfaced earlier this year, as ATO data-matching activities on rental income landed some taxpayers with letters containing incorrect information.
As previously reported by Accountants Daily, the written communication stated that the recipient of the letter may not have included all rental income for their properties in their tax return, with an audit and potential penalty warning.
Multiple tax agents claimed some of their clients who had received the communication did not actually own any of the properties listed in the letter, leading to extreme stress and confusion.
“The ATO’s letters we reviewed varied in quality and clarity. The ATO focuses on what it wants to say, not what the taxpayer needs to know, without thinking about how the letter will be read or interpreted,” Owen said.
“The ATOS’ clear and direct language can sometimes seem threatening and imply guilt or assign blame to the reader. When they say, ‘you must act’ or ‘you didn’t report correctly’, it can feel like they are accusing you of something rather than helping you get it right.”
Based on the review, the Tax Ombudsman suggested that the ATO make a series of improvements, including:
- Reviewing how letters were designed and drafted, involving people with the right skills and knowledge to write clearly for the intended readers.
- Update templates with standard information for diverse audiences.
- Apply a structured and consistent test of letters with a variety of taxpayers and tax professionals to ensure they are fit for purpose. This should include developing ways to effectively gather and implement feedback.
- Ensure taxpayers’ and tax agents’ communication preferences were applied to all letter templates.
In addition to the lack of clarity and poor tone, Owen said the letters could better support culturally and linguistically diverse audiences, First Nations people, and people with disabilities.
“Letters from the ATO must be written in ways that allow every reader to understand them, whatever their origin, background, education or circumstances,” she said.
“The ATO can definitely do more work with agents and taxpayers to help people understand what information needs to go where, so that the right communication reaches the right person at the right time.”
Susan Franks, CA ANZ tax, superannuation and financial advice leader, said the professional accounting body regularly received complaints from members about ATO letters, particularly in relation to letters about pay-as-you-go (PAYG) instalments and Division 293.
“It’s pleasing that the Tax Ombudsman specifically reviewed these letters, in this important piece of work. The Plain English report commissioned by the Tax Ombudsman as part of her review confirms the concerns of CA ANZ members,” she said.
“We support the Tax Ombudsman’s recommendations for the ATO to review its letter design framework, develop a framework for consultation and user testing of all template letters, review how taxpayer and tax agents’ communication preferences are applied and evaluate options for gathering direct feedback on letter clarity and comprehension. It’s a positive step forward for the profession and taxpayers that the ATO has already agreed to action these recommendations.”
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