ATO under review following substantiated ‘maladministration’

This investigation follows an independent investigation by Owen into the ATO’s management of a 10-year case concerning a taxpayer who made allegations against the ATO.

“Our investigation found that some but not all allegations of maladministration against the ATO were substantiated … [there was] no evidence to substantiate some of the complainant’s more serious allegations,” Owen said.

A Current Affair initially reported on allegations by the taxpayer against the ATO on 15 July 2025. Despite some reports, the Tax Ombudsman confirmed with Accountants Daily that the initial investigation was opened by Tax Ombudsman Ruth Owen, not ATO commissioner Rob Heferen.

In a statement provided to Accountants Daily, the ATO said: “...we acknowledge that there are some areas where improvements are to be made, and we have already begun making process improvements.” The ATO did not provide further details about these improvements.

Accountants Daily was unable to obtain the independent report resulting from the ombudsman’s investigation on confidentiality grounds, as it contained personal data about the taxpayer. 

Speaking with Tax Controversy founder Bruce Collins, who Accountants Daily understands assisted the taxpayer with a variety of tax-related matters, said that Owen’s report revealed that maladministration arose after an ATO investigator allegedly breached taxpayer secrecy provisions in his dealings with the taxpayer's investigation.

Collins told this brand that the report also revealed institutionalised bias within the ATO, showing that the ATO used the grounds that the taxpayer’s businesses had entered various forms of insolvency to determine that all of his future activities were fraudulent.

“The bias that was identified was [through] the case officers in the compliance area dealing with the assessment of liabilities and the debt collection officers … [who used] the harshest possible tools applied, because they believed that the taxpayer was high risk,” Collins added.

Through her review, Owen aims to examine the ATO’s safeguards, frameworks, structures, guidance, and training, and to assess whether they provide appropriate guidance for investigators’ judgement and discretion.

Further, her review will assess how audit and criminal investigation areas, and any related enforcement actions arising from those investigations, can significantly affect taxpayers.

The ombudsman said that since the review has a specific focus on the ATO’s internal controls, it will not seek broad public input but will instead conduct targeted consultation with select stakeholders,  welcoming “any input from anyone with a relevant contribution to make based on their experience in the tax system”.

“We hope to finalise this follow-up review by July, at which point we will publish our findings and recommendations,” Owen said.