Australian Tax Office in privacy blunder

Another Australian data security problem comes to light – the Federal Ombudsman doubles as Taxation Ombudsman and last week reported on tax activities in 2005 (see the report page 12) One of the complaints investigated was from a taxpayer, Mrs. J. who received from the tax office a letter containing information about expenses claimed by another tax payer.

It turned out that when the Ombudsman contacted the Tax Office to make inquiries he found they were already aware of the issue – in fact 4000 taxpayers were affected by a faulty mail out, the Tax Office was in the process of contacting them and had alerted the Federal Privacy Commissioner.

The Ombudsman assured Mrs. J. that no one had been sent her details in error. However the Ombudsman’s special tax advisor is quoted in The Australian Financial Review 24-25 June as saying that it was unclear to what extent the privacy of the remaining 4000 taxpayers had been breached. He said the issue for the Ombudsman was that “we only know half the story”, but he was still confident that the Tax Office had acted appropriately because it had referred the matter to the Privacy Commissioner. He sounded pretty understanding about the whole thing really – “it’s a regrettable error, but there is always this danger for any government agency that has automated processes”.

We might all find it reassuring that the Tax Commissioner told a consultative committee last week that the Tax Office is making efforts to improve its letter mail outs to taxpayers in a “letter improvement project”.