ATO told to sharpen focus on bias risk
Media release. Monday, 27 July 2026
A Tax Ombudsman review has warned that unchecked bias in tax administration can have serious consequences for taxpayers, finding the Australian Taxation Office (ATO) should do more to manage the risk.
The review was initiated after an investigation into historical allegations of ATO maladministration involving bias and prejudice. It examined whether the ATO’s current processes, guidance and training prevented bias or prejudice from influencing its decisions, particularly where they can significantly affect a person’s livelihood.
“The ATO has improved how it makes decisions about taxpayers in recent years, however this review shows there’s more to be done, particularly by explicitly recognising bias as a risk and strengthening controls so they are embedded in the ATO’s everyday processes,” Tax Ombudsman Ruth Owen said.
Ms Owen said she’d heard concerns from taxpayers and tax professionals that once a taxpayer is labelled as “bad” it is difficult for them to remove that label, and this could ultimately undermine public confidence in the ATO’s impartiality.
The review found some of the ATO’s processes were not designed to counter bias, meaning staff were not explicitly prompted to consider the risk of bias in their decision-making and to retain an open mind in considering the facts.
“Guarding against bias is not a set-and-forget exercise; it requires ongoing vigilance, regular review, and a willingness to continually challenge assumptions as circumstances, data, and risks evolve,” Ms Owen said.
Ms Owen said she was also concerned about the ATO breaking its own rules or processes because they believe they are acting in the public interest.
“The community expects the ATO to act impartially, lawfully, objectively and without bias or prejudice, regardless of a taxpayer’s past behaviour or history. The ATO’s decisions must always be based on evidence, applied fairly and regularly checked against the risk of bias.”
Ms Owen said bias and prejudice could affect tax administration in many ways. Officers may pursue a pre-determined outcome, give too much weight to past conduct, or fail to consider current evidence with fresh eyes.
“While bias exists in all organisations, the risk is heightened in teams regularly dealing with non-compliance or suspected wrongdoing,” Ms Owen said.
The Tax Ombudsman’s review made two recommendations to the ATO, both of which were accepted:
- assure itself and the community that its controls against bias and prejudice in compliance and enforcement actions and decision-making are working effectively; and
- develop and implement a plan to address identified gaps in bias controls, including strengthening explicit bias checks, training, assurance guidance, data and monitoring, and the language used in disclosures.
“Strong bias controls are not about second-guessing ATO officers, they are about protecting people from avoidable harm, supporting good decision-making and maintaining public confidence in the tax system,” Ms Owen said.
The Tax Ombudsman will monitor the ATO’s progress in responding to her recommendations.
Access the full report on our website: Reviews of allegations of maladministration involving bias and prejudice.
Media contact
Emma Collien. Director, Communications.
Phone: (02) 8239 2190
email: [email protected]