This month we're doing something different.

The Tax Ombudsman's GIC remission review landed last week, followed by a direct address from Ruth Owen CBE GAICD on Friday. It's significant enough that we've written a full analysis rather than folding it into the usual format. You'll find it below.

Next month's In Brief will revert to our usual format and cover the upcoming Payday Super pressure cooker: why that's likely to have an impact on tax debt, and what the early cases through the new reconsideration pathway are actually showing us.

If you have a client with ATO debt and a GIC remission knockback in the past 18 months, don't wait until next month. Get in touch.

THE SUMMARY VERSION

The Tax Ombudsman's review of the ATO's GIC remission process is in. The ATO accepted all four recommendations, most of which were already implemented before the report was published.

The process has changed. The framework hasn't. On paper, it's more accessible and more contestable than it was. In practice, it places more weight on preparation, not less. And the real question, the one that matters most for advisors and their clients, is whether any of this actually results in more remissions. We won't know until the numbers bear it out. And the Ombudsman was direct on this: the material impact is yet to be seen. The ATO needs time to operationalise the changes before outcomes shift in any measurable way.

Monitoring implementation is built into the review mandate. This isn't the end of the story. What follows is our read on what each change means for the cases you're working on now.

WHAT CHANGED

GIC remission decisions are now made by a centralised specialist team.

From January 2026, decisions above $2,500 no longer sit with individual case officers. More consistent outcomes, which is genuinely positive. But also less forgiving of an underprepared application. There's no case officer to ask a clarifying question or fill a gap. What goes in determines what comes out.

There is now a standardised application form.

Also from January 2026. It structures what needs to be addressed and gives applicants a clearer starting point. Useful, but it doesn't tell you how to make a strong case. That still requires careful preparation.

A refused application is no longer the end of the road.

Before this review, the only formal avenue for challenging a GIC remission refusal was Federal Court judicial review: process only, not merits. In practice, a refusal was final. That has changed. A business can now request reconsideration on the basis that the criteria weren't correctly applied. No new information required. No court. This is the most significant change to come out of the review. A reconsideration request is made in writing to the ATO, citing the specific grounds on which the original decision failed to correctly apply the criteria.

The ATO agreed to explore upfront GIC remission for businesses on a compliant payment plan.

Right now, GIC compounds daily even while a client meets every payment under an agreed plan. The Ombudsman's recommendation asks the ATO to "explore options for upfront agreement of full or partial GIC remission for a specific period (including the future period of a payment plan) for taxpayers repaying their debt." Not in place yet. But the ATO can implement this without legislation, which makes it a realistic near-term development.

The 4 recommendations in full

Recommendation 1: Review what has already changed.

The centralised team, the standardised form, the updated online guidance were all in place before the report landed. Recommendation 1 also requires the ATO to conduct a formal post-implementation review within 12 months. Accountability for changes already made, not a new change in itself.

Recommendation 2: Go further on remission.

Better guidance and training for the centralised function. Greater use of partial remission: remitting GIC for part of a period, or partially reducing the amount, rather than all-or-nothing. And the upfront payment plan remission option above. The direction is clear. Implementation is still being worked through.

Recommendation 3: Reduce inconsistency in decision-making.

The Ombudsman found inconsistency had produced unfair outcomes in both directions: applications that deserved approval were rejected, and some that should have been declined were approved. Recommendation 3 directs the ATO to run calibration sessions on complex cases, tighten guidelines on when officers should request more information, and flag hardship and vulnerability earlier. The centralised team addresses this structurally. This recommendation addresses it procedurally.

Recommendation 4: Improve refusal letters.

Refusal letters were found to be generic, unhelpful and in some cases lacking empathy. They didn't explain how decisions were reached, what evidence was missing, or what options the taxpayer had. Recommendation 4 requires the ATO to fix all of that. The administrative reconsideration pathway flows directly from this: not a new legal right, but a process change that makes challenging a refusal more practical. A client who got a knockback may not know why they were refused or whether the decision was even right. This recommendation means they will.

How we got here

Frustration and inconsistency. The Ombudsman acknowledged both when speaking on the review. And the volume of submissions reflected a system that wasn't working consistently for the people using it.

GIC is not a minor line item. Of the $54.2B in uncontested ATO debt, 18 cents in every dollar is now GIC, up from 13 cents in 2019. The unpaid GIC balance has grown 185% over six years, almost double the 94% growth in the underlying debt. The interest is outrunning the debt itself.

In FY2025 the ATO received 126,000 remission requests and remitted $2.56B. That sounds substantial. It's worth understanding what it actually represents. 126,000 applications against 19.7M lodging taxpayers is 0.6% – six in every thousand. Most businesses with ATO debt never apply at all. Some don't know they can. Others tried, were refused, and had nowhere to go. The 0.6% reflects both.

In late 2023 the ATO's approach tightened. Refusal rates increased. The professional community noticed. Complaints to the Ombudsman followed.

What didn’t change

The legislative criteria for GIC remission have not materially changed. The ATO's discretion has not materially changed. What determines outcomes – the quality of the submission, how well it maps to the criteria, how it accounts for what the ATO already knows about the applicant – is the same as it was before the review.

What did shift was how strictly the ATO applies those criteria. We were already seeing that on the ground before the review confirmed it. The bar moved. The Practice Statements didn't change. But the way they're being read did, and the review hasn't changed that.

In some respects the bar is higher now. A written process with a centralised team is less forgiving than a conversation with a case officer who might ask a follow-up question to fill a gap in the application. The new process rewards preparation at least as much as the old one did, and probably more so.

The review records an approval rate gap: large businesses at 84% last year, SMEs and individuals at 75–77%. That gap is real. But it is worth taking a beat to consider what's likely not represented in those numbers. They only capture the individuals and businesses that actually applied, and by fair assumption, that group skews heavily toward those who already knew to apply, understood the process, and had the professional support to construct a reasonable case.

The least prepared, least aware and most financially stretched businesses are largely absent from that data. The true disparity in outcomes between those with strong preparation and support and those without is almost certainly wider than those approval rates suggest.

What it means today

Past knockbacks are worth looking at again.

If a client received a GIC remission refusal in the past 18 months and their circumstances weren't fully or accurately presented, that decision is no longer effectively final.

The threshold for reconsideration isn't new evidence. It's a case that the original decision failed to correctly apply the criteria. That's a meaningfully lower bar than most advisors will assume.

The Ombudsman found that refusal letters routinely failed to explain how decisions were made and what options the taxpayer had. A client who got a knockback may genuinely not know what was missing from their application, or whether the refusal was correct. The reconsideration pathway exists precisely for that situation.

GIC is more expensive than it was six months ago.

From 1 July 2025, GIC is no longer tax-deductible. For most businesses that's a real cost increase of 30% or more, depending on their marginal tax rate. A dollar of GIC that previously carried a partial offset now costs a full dollar.

The case for acting early, negotiating a reduction and entering a sustainable payment arrangement before enforcement begins, has never been stronger.

What we’re watching

The reconsideration pathway and the centralised team are both new and untested at volume. The recommendations are sound and the ATO's response has been constructive, but what this looks like in practice over the coming months will be the real indicator of whether the review delivered what it intended. We'll report back.

What the cases raised in the Ombudsman’s discussion on the review made clear: this is not a magic bullet. Where the process doesn't deliver, escalation to the Ombudsman remains an option – and is expected to be used. But nobody can afford to wait for the new process to find its feet. GIC is compounding every day while the ATO embeds the changes.

The Tax Ombudsman has also flagged the ATO's use of Director Penalty Notices for review in its 2025-26 work plan. DPN issuance increased 136% last year. For any director with outstanding company tax debt, that's a development worth keeping across. A DPN shifts the debt from the company to the director personally – it's no longer a business problem.

Our read

The Ombudsman's review is a genuine step forward. The reconsideration pathway addresses a structural problem that's been limiting outcomes for years. The ATO's willingness to move before being formally directed to is an encouraging sign.

But this is a process change, not a policy shift. The criteria haven't moved. The ATO's discretion hasn't changed. What has changed is that the process is more navigable, refusals are more contestable, and past knockbacks are worth a second look.

That's useful. It's not a transformation.

What the review confirms is what advisors working in this space already knew: preparation and the quality of the submission determine outcomes. The new process is less forgiving of gaps, not more. The reconsideration pathway adds a meaningful option where none previously existed.

The real test is whether the centralised team, over time, produces more consistent outcomes. We'll be watching closely and will report back on what the early cases through the reconsideration pathway are actually showing.

THAT’S IT

Got feedback or think we missed something? Hit reply.

Need to talk to the Tax Assure team? Book a consultation or call 1300 952 295.

Tax Assure works on an assessment and engagement fee followed by a success fee based on GIC and penalties actually remitted, not core debt. Initial consults are obligation free.

<sup>Disclaimer: The information provided is for general purposes only and should not be considered as specific financial, tax, or legal advice. We recommend consulting with a qualified tax professional or advisor to discuss your specific circumstances before making any decisions or engaging with the Tax Assure team directly.

Sources: Tax Ombudsman, In the Interest of Fairness, March 2026. taxombudsman.gov.au | Tax Ombudsman GIC Remission Review Webinar, 6 March 2026. taxombudsman.gov.au | Tax Assure internal data across matters managed 2019-2025. Insights on GIC remission outcomes, payment plan dynamics, and ATO engagement reflect Tax Assure's direct experience working across hundreds of matters.</sup>