What Counts as a "Reasonable Excuse" for a Late Tax Return?

A reasonable excuse for a late tax return is a circumstance genuinely beyond your control - serious illness, natural disaster, family crisis, or events like fraud or system failures - that directly prevented you from lodging on time. Where the ATO accepts a reasonable excuse, Failure to Lodge penalties can be remitted entirely, though any tax owed remains payable.

Excuses that succeed

• Serious illness or injury - yours, or a dependant you were caring for, around the lodgement period
• Mental health conditions - increasingly recognised, particularly with treating-practitioner support
• Natural disasters - floods, fires and cyclones affecting your records, home or business
• Family breakdown, domestic violence or bereavement
• Circumstances outside your control - records destroyed, identity fraud, serious agent failure (safe harbour may apply)

The common thread: the event explains the specific period of non-lodgement, and you acted within a reasonable time once it passed.

Excuses that fail

Being busy, finding tax confusing, not having the money to pay (lodging and paying are separate obligations), forgetting, or relying on a partner who "usually handles it." These aren't fatal to remission - they just need to be reframed around the genuine underlying circumstances, which usually exist when someone falls years behind.

How to actually use a reasonable excuse

It isn't a box you tick at lodgement; it's an argued application supported by evidence, submitted after the overdue returns are lodged. The framing matters: a chronology connecting events to lodgement periods, with documents attached, is what decision-makers act on. This is precisely the work TaxNudge does in every penalty engagement.

General information only - not personal tax, financial or legal advice. Consider your own circumstances or speak to a registered tax agent. Remission of penalties or interest and payment plans are decisions of the ATO and outcomes can't be guaranteed.