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The Tax Office, the TPB and the kerfuffle wars
Neil ChenowethSenior writer
Tax Practitioners Board chief executive Michael O’Neill ... not Mr Popularity among some senior ATO ranks. Alex Ellinghausen
It’s one way to describe the six attempts that senior tax officers made to sideline or sack Michael O’Neill, the chief executive of the TPB, while he led the tiny agency’s broader investigation into PwC in the teeth of opposition from the ATO, detailed in ATO responses to Questions on Notice from Greens senator Barbara Pocock, This included three times bringing up unsubstantiated bullying claims, as well as claims that O’Neill was acting illegally in investigating PwC, and other manoeuvres.
The sheer number of moves against O’Neill suggests a powerful animus directed against him by some senior figures at the ATO – this would be the kerfuffle bit – which shows little sign of flagging. Consider the failed attempt last year (well before Heferen’s time) to take media interaction to a whole new level, with a fraud investigation targeting The Australian Financial Review.
At least that was the plan, but the ATO’s Fraud Prevention and Internal Investigations unit didn’t seem to immediately grasp the critical importance of the matter when an unnamed senior tax officer referred it to them on June 14 last year.
A courageous referral
The fraud unit was asked to investigate communications between the TPB’s O’Neill and this aged (male) columnist because “the reporting and media inquiries received by the ATO were indicating information not otherwise publicly available had been leaked”, the ATO says in its response to Pocock.
Presumably ATO leaders were mulling this referral for a while, but the immediate trigger appears to have been a media inquiry the previous day, when the Financial Review emailed the ATO about a proposed story on PwC’s tax practice. The email quoted multiple PwC sources and included three proposed quotes from two unnamed ATO officers.
This made the referral a little awkward – Sir Humphrey Appleby might have called it courageous – because the anonymous ATO officers quoted in the email were very senior figures. A serious investigation might have identified just how indiscreet they had been. In any case, the email had no connection with O’Neill.
The fraud unit was unenthusiastic, advising that leaks are “very difficult to prove”, though running an investigation could have some “deterrent” value. So, on June 21, 2023, they swept O’Neill’s files and “all email correspondence between the ATO and the AFR”, and found there was nothing to see. The only exchanges between the Financial Review and the Tax Office were with the ATO media unit. End of investigation.
But on July 10, ATO Corporate Affairs went back and reviewed those emails again. Staff concluded once more there was nothing there and the case was closed again. Why was it revisited? That morning, the Financial Review had revealed how PwC partners had leaked not only Treasury secrets but ATO briefings as well. The next day, the paper reported on a furious 2021 letter from commissioner Chris Jordan to then-TPB chairman Ian Klug, obtained through freedom of information, where Jordan demanded the TPB step back from its PwC investigation.
No one could say tax administration is without passion. The fraud inquiry suggests anger at the ATO over how the PwC scandal was exposed hasn’t gone away. It’s the kerfuffle that keeps on giving.
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Neil Chenoweth is an investigative reporter for The Australian Financial Review. He is based in Sydney and has won multiple Walkley Awards. Connect with Neil on Twitter. Email Neil at nchenoweth@afr.com.au
