ATO & SRO Debt Recovery | Litigation Experts

Featured case study — $17.8M Director Penalty Liability significantly reduced

Problem.
The ATO brought a claim for a summary judgment against two individuals to recover tax debt of AUD $17.8M.

Aptum’s role.
Aptum was engaged to dispute the application, and caused the ATO
to withdraw the summary judgment application. Subsequently, orders were made for the ATO to pay Aptum’s clients’ costs of the summary judgment application. The ATO then pursued Aptum’s clients for reduced director penalty liabilities in the Federal Court of Australia. Aptum defended this action on the basis that our clients had been shut out from the company’s affairs by reason of the fraud committed by another director, and positioned the clients for negotiations with the ATO.

Outcome.
The ATO subsequently entered into settlement negotiations, with Aptum negotiating an outcome for the clients that represented a significant reduction in the original tax liability.

Read the full case study

What the ATO can do to recover a tax debt

The ATO is not a normal commercial creditor. It has one of the strongest recovery toolkits of any creditor in Australia, and most of its tools start a clock the moment they’re issued — without needing a court order.

Each tool has a defence. Each defence has a window. Aptum defends against the full range of ATO recovery actions.

Director Penalty Notices (DPNs).

Personal liability for company PAYG withholding, GST and Superannuation Guarantee Charge. 21-day window from the day the ATO posts it — not the day you open it. Aptum’s full guide to DPNs is here.

Garnishee notices.

A garnishee notice can be issued directly to your bank, your employer or any debtors you may have, requiring them to pay funds otherwise owed to you to the ATO instead. The bank usually complies without telling you in advance. No court order required. Garnishee notices can be withdrawn in some circumstances, but you need to act quickly. Payments can rarely be reversed.

Creditor's statutory demands.

Served on companies for debts the ATO claims are payable. 21 days to pay, agree a payment plan the ATO accepts in writing, or apply to set the demand aside. Miss the window and your company is presumed insolvent — and the ATO can use that to apply to wind it up.

Winding-up applications.

Federal Court proceedings to wind up a company over an unpaid tax debt. Aptum has secured ATO withdrawals of winding-up applications by negotiating commercial pathways.

Bankruptcy notices.

For individuals. 21 days to comply or apply to set aside. Real risk of bankruptcy if the debt is above the threshold and isn’t dealt with — and as we explain below, bankruptcy is one of the ways the ATO can ultimately reach your home.

Freezing orders.

Court orders restraining you, and sometimes third parties, from dealing with certain assets. Breaching one can amount to contempt of court. We resist the application or work to vary the terms.

Security bond demands.

Notices requiring you to provide security for an existing or anticipated tax liability. The amount and the form of the security are both open to challenge.

Formal notices and information requests.

Notices requiring you to provide information or submit to a formal interview. Compliance is mandatory, but framing and timing are often negotiable, and the use of the information you provide is constrained by law.

What Aptum brings to your matter

Aptum’s tax disputes practice is led by Michael Buscema, our Practice Lead for Tax Disputes. For 11 years prior to joining Aptum, Michael worked for the ATO and Commonwealth Treasury, holding a range of senior positions including acting Assistant Commissioner of the ATO. During his time at the ATO, Michael oversaw the ATO’s most complex, strategic recovery cases and was responsible for resolving multiple disputes valued over $100 million. Michael is supported by Nigel Evans, Aptum’s Managing Director and Co-Founder. Before starting Aptum, Nigel spent 11 years at the commercial Victorian Bar, including work acting for the ATO in tax matters. Nigel is listed in Best Lawyers in Australia for Tax Law (2026) and recognised by Doyle’s Guide as a Leading Commercial Litigation and Dispute Resolution Lawyer.

The ATO isn’t a normal commercial creditor

As the Aptum team puts it: “When I was a litigator for the ATO, it was common for taxpayers with large sums of tax debt to approach the ATO and offer, for example, to pay 50% of their debt within 30 days if it would resolve the matter. Unfortunately, the ATO does not allow this. They are under a statutory duty to recover tax debts unless they are irrecoverable at law or uneconomical to pursue.”

Knowing what the ATO can and cannot agree to is the difference between a workable proposal and an unanswered one.

Core debt can’t be negotiated away. Interest and penalties can.

Tax debt is composed of core debt plus interest and penalties. Unless you object, core debt cannot be negotiated away. Interest and penalties can be remitted – but only where your application meets the ATO’s legal practice requirements. We prepare applications in the form the ATO is structured to assess.

Recent ATO posture matters

The ATO’s approach to General Interest Charge (GIC) remission has tightened in recent years – often through changes in administrative practice rather than published policy. When the Inspector-General of Taxation called for public submissions on GIC, Michael Buscema contributed a detailed response. We bring that posture into how we frame every remission application.

What happens when you engage Aptum

Aptum runs every matter under our project management framework, with clear expectations on timing, cost and scope from the first call. Before you pay us anything, you get two points of contact, both free, so you know exactly where you stand. No surprises.

Step 1

Diagnostic call (15 minutes)

You tell us what the ATO has served on you and the business or personal context. We tell you whether the matter is genuinely contestable, what the realistic outcomes are, and what to expect on cost, timing and scope if you engage us. This first call is free and there is no obligation.

Step 2

Value conversation (free)

If the matter is one we can help with, we bring you in for a second conversation, in person at our office or over Teams, with the practice lead who would run your matter and your client experience coordinator. You get the time and expertise of a senior practitioner who has handled matters like yours, someone with real experience who can give you genuinely useful guidance on how to approach it. Real expertise before you have committed to anything, not a fake triage.

Step 3

Pathways assessment

Once you engage, you receive a documented strategy and a cost forecast aligned to the stages of your matter. Our first practical move is to notify the ATO that you are represented and that further recovery action should be paused while a substantive response is prepared. This rarely stops everything, but it slows the clock on what would otherwise be an automated escalation.

Step 4

Execution

Depending on the action, this is the phase for applications to set aside (garnishees, statutory demands, bankruptcy notices), DPN responses and remission applications, defences to summary judgment applications, or negotiations with the case officer or recovery team. Routine documented strategy. Regular communications. A relentless focus on the essential issues. Project management isn’t a bolt-on at Aptum, it’s a discipline embedded in every part of our practice.

How we manage cost

Litigation isn’t cookie-cutter, and we don’t pretend it is. What we commit to is one of our five client service promises: clear expectations as to the timing, costs and scope of our engagement, and updating those expectations as early as possible if anything changes. That’s part of how we run every matter, not a pricing claim invented for this page.

Diagnostic call.

A 15-minute call to work out exactly what you’re facing and what your options are.

Estimate and scope.

Once engaged, you receive a documented strategy and a cost forecast aligned to the stages of your matter. Stage-based budgets, regular reporting, and any scope changes are documented and agreed in writing. Where a matter has a tight, defined scope – for example, a single application to set aside a garnishee notice – we can give you a fixed-price option.

Investment mindset.

Aptum approaches litigation with an investment mindset: the most practical outcome in the shortest possible time, at the least possible cost, with the biggest possible return.

Recent matter outcomes

$17.8M Director Penalty Notice debt: significantly reduced

Two directors faced summary judgment for $17.8M in director penalty debt. Aptum caused the ATO to withdraw the summary judgment application, obtained costs orders in our clients’ favour, and subsequently negotiated a significant reduction in the underlying director penalty liabilities. Federal Court of Australia.

Judgment set aside and debt removed in case involving domestic violence

A client was sued for a debt that they were unaware of because their spouse signed them onto a business without their knowledge. Aptum was able to step in to set aside the judgment and negotiate with the ATO to remove the client’s liability in full, allowing them to finally move on with their lives.

DPN defences: success for multiple clients

Aptum has successfully defended multiple DPNs in circumstances where directors took all reasonable steps to comply with their tax obligations, and where there have been issues with the notices that were sent by the ATO. Defences removed all personal liability.

Winding-up applications prevented

Aptum has stepped in to prevent the ATO from winding up numerous companies in circumstances where directors needed support in getting back on track. Aptum has negotiated outcomes that see the ATO dismiss their applications and provide companies with the room to get back on track.

Do you need a lawyer, an accountant or a tax debt negotiator?

It depends on what stage you’re at and what’s been served on you. We tell clients the truth: not every tax debt problem needs a lawyer. But several do, and the wrong choice early often costs more than it saves.

When your accountant is the right call

If the ATO hasn’t moved against you yet and the issue is a payment plan, a return amendment or a routine objection, your accountant is often the right starting point.

They know your numbers. They can lodge variations. They can negotiate small remissions.

When a tax debt negotiator is the right call

Specialist tax debt negotiators work in the negotiation-only space. They are TPB-registered, they’re commercial about pricing, and they can resolve straightforward payment-plan and remission matters. They are not lawyers, and they don’t appear in court.

When a litigation lawyer is the right call

Once the ATO has served you with a Director Penalty Notice, a statutory demand, a garnishee notice, a bankruptcy notice, a winding-up application or a summary judgment application, you need a litigation lawyer with tax-dispute experience. The deadlines are short. The consequences of getting the response wrong include personal liability, business closure and bankruptcy. And legal privilege over your strategy and options only attaches to your communications with a lawyer.

Offices

Aptum services ATO and SRO debt recovery clients across Australia from three offices.

Melbourne (head office)

(03) 7020 9230

Level 17, Rialto North Tower, 525 Collins Street, Melbourne VIC 3000

Sydney

(02) 7202 3404

Level 1, 60 Martin Place, Sydney NSW 2000

Brisbane

(07) 3778 3693

Level 38, 71 Eagle Street, Brisbane QLD 4000

What clients say

“Very grateful to Michael and the whole team at Aptum for everything they did on my case and for all their guidance and support to achieve the best outcome. Highly recommended fantastic team. Thank you so much!”

- Tania

“I can’t recommend Nigel Evans & his team highly enough. I found him to be an excellent communicator, intelligent, caring & importantly a great listener. His advice & ability to negotiate a quick resolution for me were first class.”

- Andrew Sakeson, Property Dispute

“Prior to using Aptum Legal we had a different team assisting with a critical dispute that was significantly impacting our business operations. Once Aptum Legal took over I was instantly put at ease with the level of professionalism, strategy coherence and competency that the team brought to our case.”

- Andrew Moir (ArcStructural Pty Ltd)

Frequently Asked Questions

Can the ATO take money out of my bank account?

Yes – and the ATO doesn’t need a court order to do it. The ATO can issue a garnishee notice directly to your bank, your employer or any debtors you may have, requiring them to pay funds otherwise owed to you to the ATO instead. The bank usually complies without telling you in advance. You find out when you check your balance. Garnishee notices can be set aside in some circumstances, but only if you act quickly.
How long do I have to respond to an ATO statutory demand?

21 days from service. Either the company pays the amount demanded, agrees a payment plan that the ATO formally accepts in writing, or applies to the Federal Court to set the demand aside. If you miss the 21-day window, the company is presumed insolvent — and the ATO can then file a winding-up application based on that presumption. The deadline doesn’t extend for weekends, public holidays or because mail was delayed.
Can I negotiate a payment plan if I owe the ATO over $100,000?

Yes – but the ATO doesn’t negotiate the way a normal commercial creditor does.

Core debt can’t be negotiated away. Interest and penalties can be remitted if the application meets the ATO’s legal practice requirements.

On payment-plan terms, the ATO will typically ask you to pay between 20% and 50% of the debt upfront and the rest over 6–12 months. That’s their standard request, though the terms can be negotiated — with a well-prepared application, you can typically get around three years to repay the debt.

The terms can be moved, but only within the parameters the ATO is structured to accept.
Can the ATO take my house?
The ATO says in its statements that it generally doesn’t resort to taxpayers’ homes. In reality, there are three ways it can happen – in our blog we explain all three in detail:
1. Warrant of seizure and sale – authorises an enforcement officer to sell your property to satisfy the debt. Uncommon, but it has happened.
2. Security arrangement – if you offered the ATO a mortgage over your home in exchange for a long-term payment arrangement, the ATO can call in on that mortgage. Also uncommon.
3. Bankruptcy is the most common of the three. A bankruptcy trustee is appointed, gains control of your assets, and can sell assets in your name.
Engaging with the ATO and seeking legal advice early – before the recovery position hardens – is the protective move.
What's a Director Penalty Notice, and how is it different from a normal ATO debt?

A Director Penalty Notice (DPN) is the ATO’s mechanism to make a company director personally liable for the company’s unpaid PAYG withholding, GST and Superannuation Guarantee Charge. The key differences from a normal ATO debt: it sits on you personally, not the company; it has a 21-day window (starting from the day the ATO posts it, not the day you receive it); and the standard DPN gives you three options to avoid personal liability — pay in full, appoint a small business restructuring practitioner, or appoint a voluntary administrator or liquidator.

Aptum’s DPN service page covers DPN defences in detail, and Michael Buscema has written a step-by-step guide for directors on what to do once a DPN arrives.

What happens if I just ignore the ATO?

First, the ATO knows. If you haven’t heard from the ATO but you know you have an outstanding tax debt, assume the ATO knows too. The ATO has powerful data-matching technology that compiles information from a variety of third-party sources, enabling it to detect people and businesses who are not complying with their obligations.

General Interest Charge accrues on most debts from the moment they’re due at a compounding rate (base rate plus 7 percentage points). The ATO may escalate from automated reminders to a case officer to formal recovery action. The ATO may report the debt to credit bureaus where the reporting threshold is met. And the recovery instruments described above — DPNs, garnishees, statutory demands, winding-up applications, bankruptcy proceedings — become available.
How long does a tax debt dispute take to resolve?

It depends on the action. The ATO can take many months to respond to defences to DPNs. Payment plans and GIC remissions can also take months. However, if Court action has commenced, you need to act quickly. If you do not respond to an ATO claim or application they may get judgment or wind up your company within a month or two of commencing their claim.
Will the ATO take me to court?

Yes, where the debt is not paid, and other recovery options have been exhausted. Common court paths include summary judgment applications in the Federal Court or state Supreme Courts (typically for director penalty debts), creditors’ petitions for bankruptcy (against individuals), winding-up applications (against companies after a statutory demand), and debt recovery actions seeking judgment for outstanding amounts. We defend all of these, and we have caused the ATO to withdraw summary judgment applications before trial — including the $17.8M matter described above.
Do I need a lawyer, or can my accountant handle it?

If the ATO has issued a formal recovery instrument — a DPN, garnishee notice, statutory demand, bankruptcy notice or winding-up application – you need a lawyer. The responses require legal argument. The consequences of getting it wrong include personal liability and business closure. And legal privilege over your communications about strategy and options only attaches to communications with a lawyer.

If the matter is pre-recovery – amendments, payment plans, routine objections – your accountant is often the right starting point. We tell clients the truth about which category they fall into.
Will the ATO accept a serious hardship release application?

Sometimes. Release from tax debt on serious hardship grounds is available to individuals (not companies) where paying the debt would leave the taxpayer unable to provide for basic living needs – food, accommodation, clothing, medical treatment, education for dependants. The threshold is high. The ATO assesses applications against published indicators. Framing and supporting evidence matter and it’s generally only available for income tax and PAYG debts.

If the ATO is moving against you, the clock has already started.

Garnishee notices freeze your accounts before you know they’ve been issued.
DPNs land with a 21-day window from the day the ATO posts them, not the day you open them.

In a 15-minute call, Aptum’s tax disputes team will tell you exactly where you stand and what your options are. No surprises.

Book your value conversation

Call (03) 7020 9230

ATO Debt Recovery Lawyers

If the ATO is moving against you, Aptum’s tax disputes practice is led by an experienced, former senior ATO lawyer.