The whistleblower behind allegations the Australian Taxation Office misused its small business debt recovery powers has cast a cloud of doubt over a subsequent tax watchdog review of the claims, arguing the investigation was botched.
In a scathing submission to a Senate inquiry into the conduct of the Inspector-General of Taxation published late last week, Richard Boyle, a former ATO debt recovery specialist, who in 2017 blew the whistle on allegations of misconduct involving his former employer, has questioned the independence of the watchdog.
Making his case in a 17-page submission, heavily redacted by the parliamentary committee, Boyle argued the IGT’s investigation of his claims was not conducted in an “open, transparent or satisfactory” manner.
Taking aim at the terms of reference for the IGT’s review and its assessment of how ATO staff deploy some of the tax office’s strongest debt recovery powers, Boyle said the watchdog had in effect ignored crucial evidence in its failure to adequately consider an earlier complaint he filed with them in 2017, months before the Four Corners report aired.
“The IGT’s Review and its conclusions are of such a significant distortion of the facts that they are either intolerably unsatisfactory, or more concerningly, may indicate an unwillingness of the IGT to form an independent, open and transparent analysis of facts provided to them,” Boyle said.
The submission sets the stage for renewed scrutiny over ATO conduct in relation to small businesses at a time when the tax office is seeking to turn the page on what has previously been described as its ‘horrible year’ by overhauling its internal culture and strengthening dispute resolution.
“Cash grab” directive resurfaces
Boyle was one of the key sources for a 2018 Four Corners/Fairfax investigation into alleged misuses of ATO debt recovery power in the issuing of ‘business crushing’ garnishee notices, which enable money to be extracted from bank accounts without the permission of their owners.
The story made national headlines and helped spark a raft of reforms to ATO processes, as well as dispute resolution services provisioned by external bodies such as the Administrative Appeals Tribunal (AAT).
Boyle, who was originally an internal whistleblower before going public after the tax office dismissed his concerns, is now being prosecuted and faces the prospect of a lengthy prison sentence.
The IGT, charged with overseeing allegations of ATO misconduct, undertook a lengthy review into allegations made by the media reports, clearing the tax office of structural wrongdoing and claiming issues were localised to an office in Adelaide.
In extraordinary revelations published in March, the IGT found an Adelaide team leader within the ATO’s debt recovery team sent an email to team members directing them to undertake an “hour of power” where they would issue five garnishee notices within 60 minutes.
But the watchdog said this email, the effect of which is the use of some of the strongest debt recovery powers in the ATO’s entire arsenal, was sent in “irony”, and that actual issuing rates of garnishee notices were much lower.
The IGT concluded the ATO had not always used its garnishee powers “proportionately and appropriately”, but said it hadn’t found evidence departures from tax office policies were “made deliberately”.
The watchdog’s findings were seized on by ATO commissioner Chris Jordan earlier this year, who argued the investigation had made it “crystal clear” there were no revenue targets for debt staff and no “cash grab” as Four Corners alleged.
Redacted submission claims botched review
But Boyle’s submission to the Senate’s Standing Committee on Economics claims the tax watchdog did not adequately consider his claim that senior ATO officials issued a directive for standard garnishee notices to be issued on all taxpayers and bank accounts, in lieu of less powerful point-in-time garnishees.
“The directive was incontrovertible, and categorical,” Boyle said, arguing the directive was a “clear breach” of the public service Code of Conduct.
Boyle’s submission to the inquiry is heavily redacted — in one instance, an entire section appears to have been blacked out — while other information, including the date Boyle filed his initial complaint with the IGT, appears blacked out in one part of the submission but visible in another.
No reasoning appears to have been offered for the redactions, but the committee has been contacted for comment.
In one redacted sentence, Boyle appears to name the ATO official responsible for issuing the directive, suggesting the IGT had access to this information but was instead directed by their terms of reference to focus on what broader mechanisms existed to ensure ATO staff adhere to garnishee notice policies.
“Nowhere in the terms of reference does the IGT indicate they had a willingness to consider, or evidence of any investigation that, the Directive had in fact been intentionally, deliberately and systematically delivered to large numbers of debt collection officers by senior executives in the Debt Business Line in the ATO,” Boyle said.
“Instead, the investigation focuses on words used in the media reporting of the author and not this author’s exhaustive effort to document the extremely concerning Directive in their Complaint.”
“Incorrect” assessments in watchdog review
Boyle also took aim at the watchdog’s assessment of ATO garnishee notice practices, particularly its estimates of how long it takes officials to issue a garnishee notice.
In a section which is also redacted in part, Boyle says the IGT’s conclusion that it would take a debt collection unit staff member on average 25 hours to issue five garnishee notices is “incorrect” and inconsistent with his own observations.
“During the period in question from June to August 2017, it was not uncommon for the author to observe debt staff in Adelaide who outright obeyed the Directive collect a significant pile of garnishees they had issued on a particular business day,” Boyle said.
Boyle claimed the number of garnishees issued by staff members in one standard working day could, and did, approach the order of 15 notices, three times as many as the IGT assessment indicated officials could issue in more than three eight hour working days.
“This author could also issue 10 garnishee notices in a day if they blindly obeyed the Directive,” Boyle said.
Boyle said while many senior debt collection staff effectively ignored the directive, others complied out of fears there would be repercussions if they didn’t.
Calls for IGT reform as whistleblower faces trial
Inspector-general of taxation Karen Payne, who was appointed recently and was not leading the watchdog at the time of the inquiry, declined to comment on the submission last Friday.
The IGT report was undertaken during a period of leadership transition at the taxation watchdog, with longstanding head Ali Noorozi finishing his stint last October and acting IGT Andrew McLoughlin delivering the report in March before Payne was appointed.
Other submissions filed with the Senate inquiry into the performance of the IGT have argued the agency is under-resourced, while small business ombudsman Kate Carnell has argued there’s a case for increasing the watchdog’s powers, including by enabling it to kickstart administrative changes within the ATO.
Boyle, who since going public as a whistleblower has been aggressively prosecuted by the government, will stand trial charged with 66 offences related to his disclosure of confidential information.
The whistleblower launched a GoFundMe crowdfunding campaign in August to fund his legal defence, raising $146,000 out of a $325,000 goal from supporters so far.
Boyle’s case comes amid broader discussion about whistleblower protections in Australia amid the ongoing and highly secretive prosecution of an Australian intelligence whistleblower known as Witness K.
This article first appeared on our sister publication SmartCompany.