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Why have I received a default assessment letter from the ATO?

Why have I received a default assessment letter from the ATO?

Have you received a default assessment letter from the ATO?

The Australia Taxation Office does not take kindly to unpaid or outstanding tax, thus the default assessment process.

If the ATO has evidence of outstanding taxable income, initially you will received at default assessment warning letter. This letter is issued when the warning letter is not actioned by the due date.

Why are default assessment letters sent?

Taxpayers who have not paid tax by the due date will trigger the default assessment letter process.

The ATO prefer to work with you, to meet your lodgement obligations however, if the cooperative approach doesn’t work, a default assessment letter will be sent.

What is a default assessment?

A default assessment involves a review of:

  • taxable income – for overdue tax returns
  • net amount or assessable amount – for overdue activity statements.

A penalty is applied for each overdue tax amount identified. However, be warned, the penalty increases if there is a pattern of non-compliance.

What do I do if I have received a default assessment letter?

The best thing to do if you have received a warning letter or default assessment letter is to contact your accountant. If you don’t have an accountant, find one that has a good reputation with the ATO.

Of course you can contact the ATO directly about arranging a payment plan. Otherwise your accountant can do this on your behalf.

If you or someone you know is in this situation please contact our friendly accounting staff.

We will sort things out for you.


This CVW Accounting blog was first published in January 2012 and updated in March 2019 and August 2021.

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