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TPB demands names of PwC partners involved in tax scandal
By Tom Ravlic
June 1, 2023
The Tax Practitioners Board investigation into the PwC tax leaks scandal continues, with the tax agent regulator telling senate estimates it has asked the accounting firm for the names of the nine partners it sent on gardening leave.
TPB chair Peter de Cure and chief executive Michael O’Neill said the inquiries into who was handling confidential information are continuing.
The TPB terminated PwC partner Peter Collins’ registration late last year because he breached confidentiality agreements with Treasury and the Board of Taxation that prohibited the sharing of the development of laws designed to stop multinationals from avoiding tax.
Collins can’t reapply for tax registration for two years, but de Cure told the senate he believed an application from Collins to rejoin the throng of registered tax agents was unlikely.
Greens senator Barbara Pocock asked de Cure why Collins was not given a five-year prohibition — the maximum under the legislation.
De Cure said the two-year prohibition was imposed because of mitigating factors, including the fact the behaviour was subject to disciplinary action that was five years old at the
“[Collins] had admitted his conduct, he had demonstrated remorse for his conduct and he advised us he would cease to practice as a tax agent,” de Cure said.
“He had three referees: one who was entirely independent and two who were other partners of PwC.”
De Cure agreed to take on notice Pocock’s request to name the two PwC referees who went in to bat for Collins.
The TPB chairman said the five-year penalty would be imposed in situations where there was no remorse, and evidence of recidivist behaviour and continued disregard for the law.
TPB ordered PwC to improve its monitoring of conflicts of interest. It was due to check in with the firm every six months over two years to ensure that the order was being followed.
The first milestone for the TPB’s monitoring of PwC’s compliance with the order is next month. That compliance visit is not the end of the regulator’s interest in how the confidential information was obtained and then used by the practice for commercial purposes.
TPB officials told senate estimates the regulator is going through thousands of documents to compile lists of people for further investigation, given the way in which the information has been circulated within the domestic and international tax practice of PwC.
The cache of emails tabled on May 2 forms a subset of the documents in the TPB’s possession that it is now combing through for further evidence of misconduct.
A PwC announcement that stated nine partners have been benched pending the result of further in-house inquiries triggered a request for the names from the regulatory authority.
PwC confirmed to The Mandarin that TPB’s request has been received. It will respond by the June 20 deadline.
Tax office officials approached the TPB in April 2020 to share information about the breaches of confidentiality for which Collins was responsible.
TPB’s O’Neill told senate estimates following a question from senator Deborah O’Neill that the first meeting with representatives from the ATO occurred at that time and the TPB requested further details.
“As a result of that meeting, the TPB requested from the ATO some materials and subsequently we received that material,” O’Neill said.
“On the 2nd of July, the ATO made a formal referral to the TPB in relation to this matter. A referral, senator, usually involves perhaps a precis document to say that ‘This is what we perceive to be the issue for your investigation’ and they would have provided attached documentation.”
The TPB published its findings and penalties on its website on the Collins-PwC matter on January 23, 2023.
PwC scandal drives rethink of legal privilege rules Michael Pelly Michael PellyLegal editor
PwC’s abuse of legal professional privilege in the tax leaks scandal has been laid bare in Senate estimates, with the ATO saying “false claims” by the firm delayed its investigations for almost a year.
It has also become clear that PwC has been the main driver for a rethink of how LPP is used during investigations by the Tax Office, which the Law Council of Australia believes has gone too far.
ATO commissioners Chris Jordan (left) and Jeremy Hirschhorn at the Senate estimates hearing Alex Ellinghausen
Senate estimates was told on Tuesday night that the ATO started looking closely at PwC in mid-2016 after earlier sending notices to the big four consulting firms about schemes that were devised to sidestep the Multinational Anti-Avoidance Law.
ATO Commissioner Chris Jordan said the schemes had emerged “suspiciously and quickly” after the MAAL came into effect on January 1, 2016. The first priority had been to stop annual revenue losses of up to $180 million.
“Another major concern was the issue of legal professional privilege, where it appeared our investigation was being frustrated through false LPP claims.
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