The ATO must be considerate of a person’s circumstances, Australia’s inspector-general of taxation has warned, after a spike in complaints over a third-party collector used to chase tax debts.

On Monday, Guardian Australia reported that the ATO had referred more than 355,000 taxpayers , including welfare recipients, to the private equity-backed debt collector, Recoveriescorp, since January 2024.

One of those taxpayers detailed her experience of being given one week to pay $2,590.33, or risk further recovery action, which Recoveriescorp said included possible legal proceedings.

The ATO referred the welfare recipient to Recoveriescorp even though she was repaying her debt through weekly instalments to the tax office at the time.

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The inspector general of

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