Be careful who you call: regulator warnings, red flags and the questions to ask any tax-debt adviser

Why this guide matters

When a business owner searches for help with tax debt, the results are full of businesses offering “ATO debt solutions”, “tax debt relief”, “business rescue” and “free confidential consultations”. Some are registered professionals doing careful, valuable work. Some are unregulated advisers whose business model is fees for steering you into a restructure or liquidation. From the outside, they can look identical.

Australian regulators have been unusually direct about this risk. This guide pulls together what they say — the ATO, ASIC, ARITA (the restructuring and insolvency profession’s association), AFSA and the Tax Practitioners Board — so you can make a calm, informed choice.

We’re a funder, not an insolvency firm or a tax agent. We have an interest too: we’d like you to consider funding. So hold us to every standard in this guide.

What the regulators say

ASIC: an unregulated industry

ASIC’s page on illegal phoenix activity makes the key point plainly: no one regulates the pre-insolvency industry, and the people working in it range widely in qualifications and experience. ASIC also notes that some of them cold-call companies that are struggling, and it tells directors to be on guard against dishonest operators who turn up offering to “restructure” a business in distress.

ASIC’s guidance for directors suggests getting advice from a registered liquidator, an appropriately qualified specialist insolvency accountant or lawyer, or a financial advice service — and getting a second opinion.

The ATO: ten red flags

The ATO’s page on insolvency advice and illegal phoenix activity, updated on 18 September 2026, sets out ten warning signs. Put in plain terms, be wary of an adviser who:

1. reaches out to you first — particularly once a creditor has gone to court;
2. suggests moving assets to someone else for nothing in return;
3. pitches a restructure whose real purpose is dodging debts or other obligations;
4. wants their fee worked out as a slice of what you owe;
5. claims to have a liquidator “on side” who will look after you personally;
6. knows a valuer who will mark your assets down;
7. wants you to give authorities information that isn’t true;
8. hints that records should be held back or destroyed;
9. offers to handle the liquidator or trustee for you; or
10. nudges you towards any form of phoenix activity.

The ATO’s warning is blunt: act on that kind of advice and you could face fines, a criminal record or prison. It recommends advice from registered liquidators and trustees, verified on the ASIC professional registers.

ARITA: the profession’s own warnings

ARITA lists similar red flags — advisers who contact you out of the blue, promise to fix all your problems for a lump sum, mention a “friendly” liquidator, aren’t members of a professional association, or offer the “impossible”. It suggests three questions for any adviser: Is what you’re advising me to do 100% lawful? Can you put your advice in writing? Do you have professional indemnity insurance?

AFSA: for individuals and sole traders

AFSA warns about untrustworthy debt advisers who create an unnecessary sense of urgency, charge fees to submit a bankruptcy application, or suggest bankruptcy or a debt agreement won’t affect your credit rating. It advises ignoring slick ads on social media promising a way out, and points people to the free National Debt Helpline (1800 007 007).

The Tax Practitioners Board: who can negotiate with the ATO

The TPB says representing a client in their dealings with the Commissioner — including payment arrangements — is a tax agent service, and anyone providing tax agent services for a fee must be registered. If someone is negotiating with the ATO on your behalf for a fee, check them on the TPB public register.

Phoenixing: the most serious risk

Illegal phoenix activity, as the ATO describes it, is shifting a company’s assets into a new entity that runs the same or a similar business, on purpose, so the old company’s debts are left behind. It’s often pitched as “protecting your assets” or “a fresh start”.

ASIC says penalties include large fines and up to 15 years’ imprisonment for directors and secretaries — and the same can apply to anyone who aided, abetted, counselled or procured it. A legitimate restructure has assets independently valued, and the new company pays that value.

Report suspected phoenix activity to the ATO on 1800 060 062 or [email protected]. See illegal phoenix activity.

Who to call first

Contact	Cost	Why
Your accountant or registered tax agent	Your usual fee	Knows your numbers; can deal with the ATO
The ATO	Free	Plans, deferrals, remission, directly
Small Business Debt Helpline — 1800 413 828	Free	Independent, confidential financial counselling
National Debt Helpline — 1800 007 007	Free	For individuals and sole traders

Then, depending on your situation: a funder if paying the ATO looks realistic, or a registered liquidator if the business genuinely can’t continue.

How to verify anyone

1. Registered liquidators and trustees — ASIC professional registers search.
2. Bankruptcy trustees — AFSA.
3. Tax agents — TPB public register.
4. Lawyers — the relevant law society or legal practice board.
5. Professional associations — ARITA, CPA Australia, CA ANZ.
6. Lenders — ask who they are, what they lend, and whether they charge anything upfront.

Check before your second conversation, not after you’ve signed.

The questions to ask — every time

1. Are you registered? With whom? What’s your number?
2. Is everything you’re advising 100% lawful? Will you put it in writing?
3. What will this cost in total, and how is the fee calculated? Is any of it a percentage of my debt?
4. Who else gets paid, and what’s your relationship with them?
5. What happens to my director penalties, including lockdown amounts?
6. What happens to my personal guarantees?
7. Will I keep control of my company?
8. Will this affect my ability to use restructuring in future?
9. What happens if it fails?
10. Do you have professional indemnity insurance?

Print the checklist from questions to ask any tax debt adviser, or use our interactive adviser red-flag check.

Why this isn’t an attack on insolvency professionals

Registered liquidators, administrators and restructuring practitioners are regulated, insured, accountable professionals. When a business genuinely can’t continue, they provide an orderly, lawful path — and good ones will tell you when you don’t need them. The concern regulators raise is about unregulated advisers, cold calls, incentive structures and dangerous advice. And there’s a practical concern too: being steered into a formal process before cheaper options — ATO plans, remission, funding — have been considered, especially when lockdown director penalties mean the process won’t remove your personal liability anyway.

How we measure up

• We’re a business funder. We’re not an insolvency firm, a liquidator, a pre-insolvency adviser or a tax agent.
• We don’t cold-call directors whose companies are in court.
• We never charge a fee based on a percentage of your tax debt.
• Loan terms and costs are in writing before you sign.
• We’ll never suggest moving assets.
• If funding isn’t right, we’ll say so and point you to free help or a registered professional.

A worked example: two calls, two very different outcomes

Here is an illustrative scenario — no real people or firms — to show how the same problem can unfold differently depending on who you call first.

A director of a small electrical contracting company has about $180,000 of ATO debt, mostly GST and PAYG withholding. Two quarters were lodged late during a stressful period, so some of it is locked down. The ATO applies to wind up the company. Within days, the director’s phone starts ringing.

The first caller says they’re “ATO debt specialists”. They offer a free consultation, say they’ve helped hundreds of companies “get rid of” ATO debt, and recommend moving the company’s vans, tools and contracts into a new company before the old one is liquidated — “to protect what you’ve built”. Their fee is a percentage of the debt they “save”. They say there’s no time for a second opinion. Measured against the regulators’ warnings, that call ticks at least five boxes: unsolicited contact after court action, a percentage-of-debt fee, a suggestion to move assets without full value, urgency, and no registration offered.

The director doesn’t sign. Instead, she calls her accountant, then the Small Business Debt Helpline, then a lawyer about the wind-up hearing. Her accountant confirms the locked-down amounts: liquidation would leave her personally liable for them, and moving assets would expose her to far worse. The business is profitable again, and she owns a home with good equity. She calls a funder; a second mortgage pays the ATO in full before the hearing, with her lawyer managing the court process. The company keeps trading, her personal exposure is gone, and nothing she did would trouble a regulator.

The difference wasn’t luck. It was the order of the calls.

What good help sounds like

It’s easier to spot bad advice when you know what good advice sounds like. Across registered liquidators, lawyers, tax agents and responsible lenders, trustworthy help tends to:

• ask for your documents and dates before giving a view;
• explain every option, including the ones they don’t offer;
• tell you what each option won’t fix — lockdown penalties, personal guarantees, the 7-year SBR bar;
• put fees and advice in writing before you commit;
• encourage a second opinion and give you time to get one;
• give you a registration number you can check today.

If the person you’re speaking to does all of that, you’re very likely in good hands — whatever the outcome.

Talk to a funder before you sign anything

If someone is pressing you to sign up today, pause. Talk to us first — it takes about a minute, there’s no credit check, and your details stay with one team rather than being passed to multiple lenders. A real person will look at whether paying the ATO is achievable and give you a straight answer either way. Please be accurate about the debt and any notices; good decisions start with good information.