An interesting article on ABC regarding the possible misuse of ATO garnishee notices: http://www.abc.net.au/news/2018-05-16/tax-inspector-general-to-investigate-ato-garnishee-orders/9765998
In my experience, garnishee notice are used less often for business than issuance of a writ to being court proceedings, or referral to debt collectors. However, it is still a strong ATO power (Section 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth) gives this power).
In deciding whether to issue a garnishee notice, the ATO will consider:
- The financial position of the tax debtor and the steps taken by the tax debtor to make payment.
- The extent of any other debts owed by the tax debtor.
- Whether the ATO is placed at risk because of actions of the tax debtor (such as the tax debtor making payment to other creditors in
preference to paying the ATO).
- The likely implications of issuing a notice on a tax debtor?s ability to provide for a family or to maintain the viability of a business.