The tax ombudsmen says it cannot protect Australian Taxation Office (ATO) whistleblowers against personal and professional reprisal.

A Senate inquiry has been looking at the performance of the renamed Inspector-General of Taxation Ombudsman (IGTO) — which watches over the ATO and hears individual taxpayer complaints.

The inquiry has heard that the tax ombudsman is unable to protect whistleblowers under current legislation.

The inquiry comes after former ATO public servant Richard Boyle made a public interest disclosure to the tax ombudsman about improper debt collection practices at the ATO, and now faces the prospect of life in prison for blowing the whistle.

Mr Boyle has given testimony behind closed doors, but his earlier written submission to the inquiry claimed the tax ombudsman's review of the ATO's debt-collection practices was botched.

He said the agency failed to offer “independent, open and transparent analysis” of his case.

Other submissions call on the Federal Government to enhance the tax watchdog’s powers to protect whistleblowers and keep proper watch over the ATO.

IGTO Karen Payne says her office has limited information-gathering powers and a limited capacity to protect people victimised as a result of their disclosure to her office.

Both Ms Payne and ATO second commissioner Andrew Mills said IGTO is unable to investigate tax officer complaints that relate to HR/employment matters.

“Tax officials can't make complaints that we must investigate,” Ms Payne told the inquiry.

“So if they want to give us information because they see something that they think we should investigate, they don't have protection if they come and talk to us — they don't have a whistleblower-style protection.”

She said the IGTO's current legislative powers only allow the office to offer protection if a formal investigation has commenced.

The senators hearing the inquiry described it as a “chicken and egg” scenario, making it difficult for the IGTO to commence an investigation without the information showing there were systemic problems.

“Exactly,” Ms Payne said.