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May 31, 2022

Resumption of offsetting refunds against old tax debts

Resumption offsetting refunds against old tax debts

The ATO has indicated that from June 2022 it will recommence offsetting client tax refunds or credits against tax debts that are on hold.
Debts on hold are previous tax debt amounts that the ATO has not undertaken any recent action to collect. These debts don’t show up as an outstanding balance on the client’s account as they have been made ‘inactive’.

In these cases the ATO has the ability to use a tax refund or credit from one account to pay off an outstanding debt on the same or another account. In some cases, the ATO can also use credits that clients receive from other government agencies to pay off a tax debt.

To check if your clients have a non-pursued debt, follow the steps outlined in debts on hold.

Related Information: Resuming offsetting of debts on hold

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