The 70-year-old actor, who currently lives in Los Angeles and first gained a public profile in the United States with his cheerful offer to "slip an extra shrimp on the barbie" in Australian tourism TV ads in the mid 1980s, arrived in Sydney last week to attend the funeral of his mother Florence Hogan.
Hogan was served with an Australian Taxation Office order after landing last Friday that prevents him from leaving Australia until he settles a multimillion dollar tax bill, lawyer Andrew Robinson said.
"These may not be the appropriate circumstances to effectively make Paul a prisoner of Australia," Robinson told Australian Broadcasting Corp. radio.
The order was "absolutely devastating" for Hogan's wife, "Crocodile Dundee" co-star Linda Kozlowski, and their 12-year-old son Chance, both of whom remained in Los Angeles, Robinson said.
Australian tax and crime investigators have fought Hogan in a five-year legal wrangle in Australian and U.S. courts to investigate evidence that he used offshore bank accounts to conceal earnings since his low-budget "Crocodile Dundee" movie became an international hit in 1986.
Tax authorities last month claimed Hogan owed tax on 38 million Australian dollars ($34 million) in allegedly undisclosed income. The exact tax bill has not been disclosed.
Hogan has denied any wrongdoing and disputes the tax bill. He has never been charged with tax evasion.
The Australian Tax Office refuses to comment due to a policy of not discussing individual cases.
Robinson said lawyers are negotiating with tax authorities to have the order revoked.
"Those discussions are ongoing. We are hoping that they will result in an arrangement that will allow him to go back to his wife and son," Robinson said, without elaborating.