Inspector general of taxation and ombudsman says she is receiving an ‘increasing number’ of complaints about tax office
Edmund Tadros Oct 28, 2025
The country’s tax watchdog is investigating PwC over a range of historic code breaches stemming from a scandal over the leak of confidential government information, including whether its advisers misused legal professional privilege to stymie probes into their conduct.
The Tax Practitioners Board is also examining allegations that the firm provided advice to clients that misled the Foreign Investment Review Board over whether a restructure was done for the purpose of cutting tax 
A third investigation relates to the actions of a current or former partner for allegedly using false and misleading information in applications for research and development tax breaks made on behalf of a client.
The investigation into the privilege and FIRB advice is focused on operational changes the firm has made since some partners used confidential information about government proposals to help clients with tax affairs.
The Tax Practitioners Board wants to ensure the firm’s updated policies and procedures ensure good behaviour from the firm’s current tax agents.
The inquiries are expected to be completed by next year, according to several people not authorised to discuss the investigations publicly. Separately, the firm is subject to an ongoing Australian Federal Police investigation into the actions of former partners relating to the leaks.
The tax watchdog’s inquiries threaten to prolong PwC’s pain from the long-running tax leaks scandal. PwC chief executive Kevin Burrowes has spent two years reforming the firm’s governance and improving culture, and more recently has spent a large amount of time promoting the firm’s cutting-edge advisory and auditing services.
A PwC spokeswoman said the firm had “implemented significant changes” following the “well-publicised set of historical matters” and was legally prevented from talking about current investigations.
“We respect the important role of regulators to investigate matters. Out of respect to the regulatory process, we do not comment on specific investigations,” she said.
“Since 2023, the firm has implemented extensive reforms to overhaul its governance, strengthen its risk and compliance, and focus on embedding a culture of sustainable high performance.”
“This includes the appointment of independent non-executives to our governance board, the publication of audited financial results and the introduction of enhanced risk management protocols.”
The Tax Practitioners Board, which regulates almost 70,000 tax advisers, led the way in uncovering the tax leaks scandal. It deregistered former PwC partner Peter Collinsin January 2023 for dishonesty and for sharing confidential government briefings with partners and clients. It has now completed 10 investigations into the matter.
Professional privilege problems
The three elements of the watchdog’s current inquiries relate to matters that mostly emerged during its investigation into Collins, inquiries by the Australian Taxation Office, parliamentary hearings and reporting in The Australian Financial Review dating back a decade.
Key was a global push that kicked off in 2013 to target international tax avoidance, known as base erosion and profit shifting. Tax officials globally wanted to crack down on the use of complex schemes, mainly by multinational companies, to reduce taxable income by exploiting global tax rules to shift revenue between different jurisdictions.
At the time, PwC was the market leader in developing and promoting tax schemes. In 2015 and 2016, the ATO’s was concerned PwC was over-represented in aggressive tax schemes that came to its attention.
To investigate, ATO officials began using the agency’s powerful, compulsory information-gathering notices to seek information about PwC’s tax advice.
In some cases, the firm resisted releasing material, claiming the documents and communications were protected by legal professional privilege that prevented disclosure without the permission of the client.
However, many of those claims may not stand up to scrutiny. The Federal Court has already ruled PwC incorrectly claimed legal privilege and the firm has signed a confidential settlement with the ATO over false privilege claims.
In addition, the firm’s former general counsel, Meredith Beattie, told a parliamentary hearing last year that its tax division had not followed her protocol in the past, meaning she had been forced to intervene and release more documents to the ATO.
A second strand of the Tax Practitioners Board’s inquiries, regarding information provided by PwC to FIRB, relates to advice provided to companies requesting approval to restructure. Those applications require details about the likely tax effect of any restructure.
The ATO has publicly said PwC’s advice at the time was probably designed to downplay the tax benefit of its recommended restructures.
Last year, ATO second commission Jeremy Hirschhorn told parliament he had “concerns that statements made to the ATO by the FIRB applicant and/or PwC as adviser … while possibly legalistically correct, had the effect of misleading the ATO as to the intended use of aggressive tax structures”.
The R&D incentive branch of the Tax Practitioners Board’s investigation relates to just one current or former PwC partner.
It follows the regulator’s decision to deregister former PwC partner Richard Gregg for making false client claims that caused a tax shortfall of more than $11 million and led to fines for the clients of more than $800,000.
The Tax Practitioners Board declined to comment.
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