TPB took a year after ATO tip to investigate PwC claim

The Tax Practitioners Board did not move to investigate PwC Australia for almost a year after receiving the first tip-off from the tax office.

The Tax Practitioners Board has published the timeline of its investigations into PwC Australia over the firm’s misuse of confidential information. Picture: NCA NewsWire / Damian Shaw

The Tax Practitioners Board did not move to investigate PwC Australia for almost a year after receiving the first tip-off from the tax office about breaches of confidentiality agreements by the firm’s former head of international tax, Peter Collins.

A timeline of the TPB’s investigation into Mr Collins and PwC reveals that the regulator, which registers tax accountants in Australia, was first contacted by the Australian Taxation Office about the scandal in late 2019, before a formal email followed on April 2, 2020. The timeline reveals the ATO was putting the TPB on notice over Mr Collins’ “possible unauthorised disclosure of confidential information”.

However, a similar timeline from the ATO shows the tax office shared the details of several PwC advisers with the TPB in December 2019, with most of those being identified over concerns “mostly related to behaviours in relation to (legal professional privilege) claims”.

This came just weeks before ATO deputy commissioner Jeremy Hirschhorn met PwC’s former chief executive Luke Sayers and David McKeering for the final time after the firm’s tax practice boss Tom Seymour was elected to run the firm.

On July 2, the ATO made its formal referral regarding Mr Collins, the day after the TPB requested further information in relation to the former head of international tax and the Multinational Anti-Avoidance Law.

The TPB’s timeline shows the regulator moved over the second half of 2020 to gain information from Treasury, before formally kicking off its investigation into Mr Collins in January 2021 – the same day it issued Treasury with formal notices for information.

The TPB must notify tax agents it is formally investigating and must reach a decision within six months unless the board extends an investigation.

The TPB’s timeline shows the regulator moved to extend its investigation into PwC in March 2021, two months after notifying Mr Collins he was in their sights.

PwC’s acting CEO Kristin Stubbins has told NSW parliament the firm only became aware of Mr Collins’ confidentiality agreements in March 2021.

However, the TPB’s timeline shows its investigation was frustrated by the ATO’s reluctance to share further information with the regulator.

“The ATO and the TPB had discussions about the limitations of sharing information,” The TPB timeline said.

“The ATO confirmed that further information could not be provided to the TPB.”

The ATO met with the TPB’s board in September 2021, with Mr Hirschhorn and ATO commissioner Chris Jordan raising “concerns” with the regulator.

A letter sent by Mr Jordan to the TPB, after the meeting, reveals the tax office was “extremely concerned that the conduct of the TPB in these investigations risks causing serious harm to the broader administration of the tax ­system”.

“As I emphasised at the board meeting on Wednesday, 1 September, it is a fundamental tenet of our administration that taxpayers should be able to deal with us with trust and confidence, knowing that their information will remain secret,” Mr Jordan said.

“Requesting taxpayer information related to their own tax affairs as well as information related to dealings and/or negotiations with the ATO seriously compromises this.”

In reply, in January 2022, after securing more information from Treasury, TPB chair Ian Klug wrote back to the ATO revealing a review of the regulator’s actions found it had “acted legally and consistent with TPB policies and processes”.

The timeline shows the TPB met in October 2022, when it made findings of breaches by Mr Collins and PwC, before sanctioning the two in November.