The first penalty you may face is a fine. Named the Fail To Lodge (FTL) penalty, a unit is charged over 28 days (or part thereof) after the deadline up to a maximum of five units. Each unit is valued at $210. The maximum fine a person may face is therefore $1, 050. This penalty is lodged automatically but the ATO may remit it if it is “fair and reasonable” to do so. In the event a penalty fails to make you lodge your tax return, the ATO may issue one or more default assessments. The assessment aims to estimate your income based on data the ATO has. Being an estimate, the assessments are regarded as rarely accurate. An assessment can be appealed, but you should be able to prove the ATO’s error with data, and not the mere argument that they are wrong. Although a fairly rare action taken by the ATO, prosecution is possible. You may be given a maximum penalty of $8, 500 or face imprisonment of up to 12 months. It is also widely believed that lodging a tax return late increases the risk of the ATO performing an audit on you. In this case, employing a registered tax agent will aid you as they will be able to help you answer any questions the ATO may raise.