iscover Dusting off the covers: old, outstanding individual income tax returns a burden on accountants
TaxNew work has landed on the paper pile for accountants, with one tax agent being notified of a client’s 20-year-old outstanding individual income tax lodgment.
In a LinkedIn post, accountant and Make Accounting Great Again founder Joe Kaleb (pictured) revealed that the ATO contacted him about an individual client with outstanding income tax returns for the 2004, 2005, and 2006 income years.
“This is the first time I have been contacted about returns going this far back,” Kaleb said in his post.
Accountants Daily spoke with Kaleb, who stressed that banks do not keep the information needed for individual income tax returns for more than about five years; he noted that all previous historical client details are contained on an old system that the ATO has access to.
To resolve the 20-year-old lodgments, Kaleb told the firm that he was forced to ring the ATO and request this information to do the lodgment.
“The next issue is you can't go that far back on your software to lodge returns. So you have to access paper returns, which you can access online for those years.”
He stressed that this will bring about a burden for both clients and accountants.
“It's going to cost the client more, because we have to access paper returns and fill in the forms manually. We can't do them on software, so it's gonna add to the cost of preparing the returns.
“We're already swamped. It’s only the start of the year, and we're already doing work for 2026. We're in the full swing of 2026 now, and we've got BASs due as well, and now we've got historical returns to worry about.
“It's just extra better work that's being created.”
Despite the burden, Kaleb said that not lodging these old outstanding lodgments will lead to further risks.
“[It becomes] a problem when you go to apply for remissions of penalties and interest, because the ATO will look at outstanding lodgements; and they'll say, ‘well, you don't satisfy the criteria for remission because you've got outstanding lodgements’.”
Further, the risks may snowball into criminal liability, he said.
“If you don't act, potentially, your client will receive a failure to lodge warning. Which can have legal implications down the track. If you ignore it, the ATO can prosecute you for outstanding lodgements; they can take you to court.”
“Don't ignore this; contact your client immediately and let them know that they are due and get in touch with the ATO and obtain the necessary information.”
Accountants Daily has reached out to the ATO for comment.
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Carlos Tse
Carlos Tse is a graduate journalist writing for Accountants Daily, HR Leader, Lawyers Weekly.