Pursued beyond the grave: Damning report slams ATO misconduct

A damning independent report into the Australian Taxation Office has found evidence of maladministration, including targeting a taxpayer for five years after she had died.

ATO Commissioner Rob Heferen ordered the investigation after reporting by A Current Affair and this masthead into the treatment of businessman Jae Jang last July.

The 144-page report, prepared by Tax Ombudsman Ruth Owen, has left seasoned tax professionals stunned, and it raised concerns that misconduct was spread across the ATO.

“Of all the ones I’ve read and been involved with, on both sides of the fence, this is probably the most significantly critical of the ATO in relation to issues of maladministration,” said Collins, who is now a tax lawyer representing Jang.

The ombudsman’s findings uncovered evidence of “maladministration” by the ATO, a pattern of bias and prejudicial conduct, unreasonable use of discretionary powers, and actions contrary to procedural fairness across a number of teams within the tax office and “not limited to just one or two individual officers”.

One element of misconduct – involving two ATO investigators disclosing confidential taxpayer information to third parties – was found to constitute “serious maladministration”.

One of those breaches involved investigator Anthony Rains, who disclosed information to New Zealand government agencies.

The ombudsman found his contact was speculative and unreasonable, creating a “perception of bias” and “inappropriate targeting” beyond the ATO’s jurisdiction, by recommending the New Zealand tax office conduct an audit of Jang’s businesses.

Collins described these disclosures as “a very serious area of misconduct” that should warrant further investigation.

An ATO spokesperson declined to answer questions as to what action had been taken.

“The ATO welcomes the ombudsman’s thorough review, and the finding that there were no instances of unlawful conduct or misfeasance,” the spokesperson said.

Jang, a 58-year-old businessman with no criminal history, was arrested and thrown in jail over tax fraud charges before eventually being exonerated during a 10-year battle with the ATO.

His sister Deannah was also targeted, and he blames the ATO’s pursuit for her death by suicide in 2017.

The ombudsman found garnishee notices issued against Deannah Jang were “unwarranted and unreasonable” and gave the impression of “guilt by association”.

“The ATO’s debt recovery actions against Ms Jang were inappropriate and lacked consideration for the potential impact on her,” the ombudsman said.

“There is, however, no evidence of any di