Tax whistleblower protections: Taxation Administration Act 1953 Part IVD

Part IVD framework

Part IVD of the Taxation Administration Act 1953 establishes statutory protection for tax whistleblowers, commencing 1 July 2019. This framework provides a mechanism for individuals to report suspected tax-related information to the ATO, the lead regulator and primary recipient for these disclosures. Corporate tax disclosures can attract both this regime and protections under Corporations Act Part 9.4AAA whistleblower protection.

Protected disclosers are afforded several key protections. These include identity protection, immunity from civil, criminal and administrative liability, and protection from victimisation. The protections are designed to encourage reporting without fear of reprisal.

Compensation is available to disclosers who suffer detriment as a result of making a protected disclosure. This aims to address any negative consequences experienced due to their reporting actions.

Eligible whistleblowers

Eligible whistleblowers under Part IVD of the Taxation Administration Act 1953 encompass a broad range of individuals. This includes current and former officers, employees and contractors of the entity in question, as well as their relatives and dependants. The protections extend to associates of the entity and those who supply goods or services to it. TPB breach reporting 2024 reforms

Furthermore, a person can be an eligible whistleblower if they are a spouse, child, or dependant of any of the individuals listed above. This broad definition aims to encourage reporting of potential wrongdoing, even from those connected to the entity through family or business relationships.

The protections afforded by Part IVD are not limited to disclosures made by named individuals. Anonymous disclosures are also protected, provided the disclosure meets the eligibility and content requirements outlined in the legislation.

Eligible recipients and content of disclosure

Eligible recipients of a disclosure under the Taxation Administration Act 1953 Part IVD include the Commissioner of Taxation, registered tax agents and BAS agents, the Tax Practitioners Board and the Inspector-General of Taxation. Auditors, directors, secretaries, senior managers of the entity, and persons authorised by the entity to receive whistleblower disclosures, are also considered eligible recipients. Note that disclosures to journalists or members of Parliament are not protected under Part IVD; protections are available under the Corporations Act Part 9.4AAA whistleblower protection for certain disclosures.

A protected disclosure must be made to an eligible recipient. To be protected, the discloser must have reasonable grounds to suspect misconduct or an improper state of affairs in relation to the tax affairs of the entity.

Disclosures to legal practitioners are protected where they are for the purpose of obtaining legal advice on the operation of Part IVD.

Confidentiality, immunity and penalties

The Taxation Administration Act 1953 Part IVD includes provisions to protect the confidentiality of tax whistleblowers. Section 14ZZW places an obligation on recipients of disclosures to safeguard the discloser’s identity. Crucially, recipients are prohibited from revealing the discloser’s identity to the Australian Securities and Investments Commission (ASIC). This confidentiality is vital to encourage individuals to come forward with information. Public companies and large proprietary companies must maintain a whistleblower policy under section 1317AI of the Corporations Act Part 9.4AAA whistleblower protection, which often incorporates tax-related disclosures.

Individuals making protected disclosures under Part IVD are afforded immunity. This protection extends to civil, criminal and administrative liability, including contractual penalties. This means a discloser cannot be sued or penalised for making a disclosure, provided it meets the requirements of the legislation.

Breaches of confidentiality and victimisation of a tax whistleblower carry significant consequences. Both civil and criminal penalties apply to those who act against a discloser.