How do I get ATO penalties or interest remitted?

The ATO has broad discretion to remit administrative penalties, such as failure-to-lodge penalties, and interest charges, in whole or in part. A remission request is exactly that: a written request explaining why the penalty should be reduced or removed. The factors that matter are your compliance history, the circumstances that caused the lapse (illness, family crisis, natural disaster, reliance on an agent), how quickly you fixed the problem once aware, and whether penalising you serves any purpose given the circumstances.

Structure the request like a case, not an apology: a one-paragraph summary of what happened, the timeline with dates, evidence for the circumstances you rely on (medical documentation, correspondence, agent records), your compliance history before the event, and the specific remission you are asking for. First-time lapses with otherwise clean histories are routinely remitted, say explicitly that this is your first lapse if it is true. If your shortfall arose because you relied on a registered tax agent and gave them the right information on time, raise the safe harbour provisions, which can excuse certain penalties entirely.

If remission is refused or only partly granted, escalation paths exist. Penalty decisions can be objected to under the formal objection process in the Taxation Administration Act 1953, and an unfavourable objection decision can be taken to the Administrative Review Tribunal. Separately, complaints about how the ATO handled your matter, delay, process failures, unfair treatment, go to the Inspector-General of Taxation and Taxation Ombudsman. Keep paying or arrange a payment plan for undisputed primary tax while the dispute runs; the fight is about the penalty, and a payment plan protects you from further interest escalation.