The Tax Office has been working on a "transformational" plan to fundamentally change Australia's corporate tax system with companies allowed to use their own accountants to sign off on their tax bills, effectively outsourcing tax oversight to the private sector.

But discussion papers obtained by Fairfax Media concede the plan, which will bring huge savings for the ATO, comes with dangers of conflicts of interest, greed or even intimidation corrupting the process.

The cash-strapped ATO, which plans to shed 900 jobs in the next six months, has been working behind the scenes for about 18 months on the scheme, which would be open to companies with annual turnover of between $100 million and $5 billion.

Senior tax officers say the ATO would reap huge savings, but the main winners are expected to be the "big four" accounting firms, PwC, KPMG, Deloitte and Ernst and Young which would reap tens of millions of dollars each year in fees for auditing work currently undertaken by the ATO.

A series of discussion papers show the level of enthusiasm among key government tax executives about the "External Compliance Assurance Process (ECAP)" which could be trialled as early as May.

The plan involves the Tax Office accepting assurances from private sector accounting firms that their client's tax is compliant.

ATO Assistant Deputy Commissioner Stuart Hamilton says the plan will save his department money and free up resources but denies that it is "stepping away"

from its responsibilities. He was frank last month with his colleagues, and senior executives from the "big four" who are also being consulted, about how it would change the relationship between corporate Australia and the nation's tax authority.

"If we can get ECAP off the ground it will be the start of something quite transformational," Mr Hamilton wrote.

Robert Jeremenko, senior counsel at industry group The Tax Institute, acknowledged that the big accounting firms stood to gain massive windfalls, but said there was no question of it being a case of putting the "fox in charge of the chookhouse".

"With the high levels of professional ethics in the profession, companies are not going to get a free ride," he said. "The ECAP idea could fit very nicely with the federal government's push to abolish $1 billion worth of regulatory burden each year.

"It also has the potential to free up Tax Office resources to focus on areas of greater revenue risk - something the federal government would certainly welcome as it battles the bulging budget deficit."

Links between the ATO and the big four firms are growing stronger with Commissioner of Taxation Chris Jordan, himself a former KPMG partner, actively pursuing a program of recruitment of tax experts from the four firms.

These firms have paid hundreds of millions of dollars in the past decade in settlements over audits of failed companies or involvement in tax avoidance schemes.

The ATO warned corporate advisers in May 2013 not to involve their clients in aggressive tax avoidance before embarking on a series of crackdowns on various corporate tax minimisation schemes.

with James Robertson