Australia’s tax authority is facing intense scrutiny after an independent investigation uncovered evidence of maladministration, including the shocking case of a deceased taxpayer being pursued for five years after her death.
The 144-page report, prepared by Tax Ombudsman Ruth Owen, was commissioned by Australian Taxation Office (ATO) Commissioner Rob Heferen following media attention surrounding businessman Jae Jang and his treatment by the tax office.
The Ombudsman’s investigation found evidence of maladministration, bias, prejudicial conduct, unreasonable use of discretionary powers, and breaches of procedural fairness across multiple areas of the ATO.
The report concluded that these issues were not isolated to a small number of employees but reflected broader systemic concerns.
Former ATO Assistant Commissioner and now tax lawyer Bruce Collins described the findings as some of the strongest criticism of the tax office he has ever seen.
One particularly serious finding involved the disclosure of confidential taxpayer information by ATO investigators to third parties. The Ombudsman classified some of this conduct as “serious maladministration.”
The report specifically highlighted actions by former investigator Anthony Rains, who shared information with New Zealand government agencies and recommended audits of Jae Jang’s businesses. The Ombudsman found the actions were speculative, unreasonable, and created a perception of bias and inappropriate targeting beyond the ATO’s jurisdiction.
Jae Jang spent a decade fighting tax fraud allegations. Despite having no criminal history, he was arrested and jailed before ultimately being cleared of wrongdoing.
The investigation also examined the treatment of Jang’s sister, Deannah Jang, who died by suicide in 2017. The Ombudsman found that debt recovery actions taken against her were inappropriate, unreasonable, and appeared to be based on “guilt by association.”
While no direct link was established between the ATO’s actions and her death, the report stated that the agency failed to adequately consider the impact of its actions on her wellbeing.
In a particularly disturbing finding, the ATO continued issuing penalty notices and pursuing Deannah Jang for five years after her death, causing unnecessary distress to her family. The Ombudsman described this as a serious failure of process and governance.
The report has now triggered four additional investigations to determine whether similar issues exist elsewhere within the tax office. These include independent reviews into ATO impartiality and internal record-keeping practices.
The ATO has acknowledged that improvements are needed but maintains that the majority of allegations raised during the investigation were not substantiated. The agency says it has already begun implementing process improvements.
Meanwhile, Jae Jang has called for urgent action to prevent similar incidents from occurring in the future. He plans to launch civil proceedings for malicious prosecution against the ATO Commissioner and Anthony Rains, arguing that accountability is needed at all levels of the organisation.
The findings have raised broader concerns about oversight, transparency, and accountability within Australia’s tax administration system.