Treasury and AGD also pushing their reindeer hard before xmas – publishing the LPP reform consultation paper today
Use of legal professional privilege in Commonwealth investigations
Agencies could share tax ‘secrets'
Saturday 21 December 2024
The Australian Taxation Office would be empowered to share tax “secrets” with other agencies, with emergency powers mooted for the governor-general in a bid to flush out critical information, under proposed legal reforms.
In the latest of six separate consultations, the government released a blueprint on Friday for reforming the country's blanket tax laws, which largely restrict the ATO and the Tax Practitioners Board from revealing many taxpayer details to other agencies.
Under the proposed changes the government could shake up information sharing arrangements between agencies, spurred on by shortfalls highlighted by scandals surrounding disgraced audit and consulting giant PwC Australia.
The professional services heavyweight was revealed last year to have deliberately misused confidential government tax information, shared by PwC's former head of international tax Peter Collins from behind a confidential consulting process with others in the firm, that allowed PwC to front-run new tax laws introduced in Australia in 2016.
Mr Collins was banned by the Tax Practitioners Board in October 2022 over the scandal, but only after years of attempts by the ATO to refer the tax partner to the Australian Federal Police or investigate the scandal themselves.
The government moved to allow the ATO to share information with Treasury, in the wake of the first revelations about the PwC scandal. Treasury then referred the PwC matter to the AFP for investigation.
Announcing its latest consultation round on Friday, the government said it would seek feedback on where it may be appropriate for the ATO or TPB to share information about serious offences, identifying fraud, or supporting professional integrity.
Under the mooted reforms, the ATO would be empowered to hand over tax information, concerning individuals and companies, to other investigative agencies.
This could result in the ATO or TPB being given approval to provide information relating to suspected frauds with non-law enforcement agencies.
Tax information relating to sanctions breaches could also be shared with the Australian Sanctions Office, with the ATO currently unable to reveal identifying information.
Commonwealth public servants who misuse the tax system or are investigated for alleged breaches would also face having their information shared between agencies under the proposed changes.
Sharing information related to fraud in the National Disability Insurance Scheme would also form a plank of the proposed reforms.
The ATO would also be given powers to request websites advertising tax evasion scams or schemes to be taken down.
The governor-general could also be handed emergency tax powers, allowing them to permit the ATO or TPB to disclose protect information “in the public interest” in the event of “unforeseen and exceptional circumstances that are not contemplated by the existing tax secrecy framework”.
The review comes as the latest in a string of inquiries, investigations, and reviews into the scandal surrounding PwC.
Two separate federal parliamentary inquiries have investigated the issue, alongside a NSW Upper House committee which investigated the state's spending on consultants.
The TPB also opened investigations on nine current and former PwC partners, of which four have since been cleared.
I learned today that, on December 12, 2024, President Biden commuted the sentence of Paul Daugerdas who, as described in the DOJ press release for his sentencing “was sentenced today in Manhattan federal court to serve 15 years in prison for orchestrating a massive fraudulent tax shelter scheme in which he and his co-conspirators designed, marketed and implemented fraudulent tax shelters used by wealthy individuals to evade over $1.6 billion in taxes owed to the Internal Revenue Service (IRS).” I have written often on the Daugerdas saga here (in relevance order, but can be sorted by reverse chronological). The documents indicating the commutation are here (White House) and here (DOJ).
District Court Revokes Bail and Orders Pretrial Incarceration in Tax Crimes Case Because of Violations of No Contact Requirement
December 2024
This blog entry will alert readers of the following publication: Misc. Authors, Tax Enforcement, 71 DOJ J. Fed. Law & Prac., No. 4 (December 2023), here.
The following is a copy and paste of the Table of
