Is the ATO actively sending Director Penalty Notices?

Is the ATO actively sending Director Penalty Notices?

Many directors assume that Director Penalty Notices are rarely used by the Australian Taxation Office (ATO). In reality, the ATO has increasingly relied on DPNs as a key tool to recover unpaid company tax debts and enforce director accountability.

In recent years, the ATO has considerably stepped up its use of Director Penalty Notices (DPNs) as an enforcement and debt collection tool. What was once a relatively limited enforcement action has now become a core part of the ATO’s compliance activity, with tens of thousands of notices issued each year as the agency seeks to recover unpaid tax and superannuation liabilities.

Recent official data: Rising Numbers

Data from independent reporting and analysis shows a significant increase in DPN activity:

• In the 2022-23 financial year, the ATO issued approximately 26,702 DPNs, covering unpaid tax and super liabilities.
• In the 2024-25 financial year, the number of DPNs soared to more than 84,000, up more than three-fold compared to the prior year.
• Between July 2024 and March 2025 alone, the ATO issued 59,320 DPNs and more than 10,000 garnishee notices as part of follow-up enforcement.

These figures indicate a marked escalation in ATO enforcement activity following a period pf relative restraint during the COVID-19 pandemic. The surge reflects both a broader compliance push and an attempt to address growing collectable debt, which the ATO has linked to unpaid PAYG withholding, GST and superannuation obligations.

What the ATO has said publicly

The ATO has farmed the increase in DPN activity as part of its broader debt-collection strategy:

• The ATO has noted that “firmer debt collection actions” are needed to ensure compliance and protect other creditors, particularly where businesses have not engaged constructively with the Tax Office.
• Spokespeople have reiterated that while the ATO prefers to work with taxpayers to resolve issues, it will not hesitate to escalate to enforcement where compliance is lacking.

This shift aligns with public statements that the ATO is using its statutory powers more actively, including DPNs, garnishee notices and other collection tools to address longstanding liabilities.

Phases of enforcement and Practice Realities

Professionals in the insolvency sector have observed what they describe as phases of ATO enforcement:

• Pre-pandemic: DPN issuance was lower and more targeted.
• During COVID: enforcement was softened, with reduced action and extended compliance windows.
• Post 2022: Enforcement resumed and escalated sharply, with higher volumes of DPNs and use of lockdown DPNs to capture historical debt.

Directors and advisers interpret this as the ATO ramping up, using DPNs not just as a last resort but as a primary leverage tool in its compliance toolkit.

Do you have more questions about our Director Penalty Notices? Read our full guide here.

The Importance of Seeking Professional Advice

This article has aimed to provide general information about if the ATO actively sending Director Penalty Notices, however, every company’s exact circumstances are different. We strongly encourage directors seeking to understand whether the ATO is currently issuing Director Penalty Notices and what this means for their business to give an insolvency professional likeDissolve to discuss your specific circumstances. Dissolve may even recommend cheaper (or free!) solutions than other insolvency firms.