Iva Ilijevski is suing her former employer, the Australian Taxation Office, claiming it did little to stop the years of abuse she says she suffered at the hands of a team leader in her Melbourne workplace due to her Croatian background.

In addition to the $1 million sought for the economic loss of being forced from her job, Ms Ilijevski is also claiming $250,000 for pain and suffering as well as her legal costs.

Documents filed to the court allege that Ms Ilijevski, had not experienced any discrimination in the first six years she worked at the ATO.

But she says things changed for the worse in 2006 when the management of her team of GST compliance officers was taken over by a Tax official.

Ms Ilijevski claims she was then subjected to a six-year campaign of vilification by the person that eventually ruined her career and her mental health.

Among the slurs alleged in the court documents, the supervisor is alleged to have said:

"Do you live in a wog double-storey house with arches and lions?"

"Do you live in a 100-square-metre home with arches and lions?"

"You have too much money."

"All you wogs would think about is money, money, money."

"All Europeans think about is money, money, money."

No findings have been made by the court to substantiate the accusations against the supervisor and the ATO, which is being held liable by Ms Ilijevski for its employee's alleged conduct and which intends to fight the case when it comes to court in April.

It is also alleged that the supervisor arranged the seating of his team to allow him to approach Ms Ilijevski from behind with criticism or ridicule and that he mocked her for speaking Croatian to her parents, who did not speak English, when the family was arranging care for her dying father.

In December 2012, Ms Ilijevski went off sick and has never returned to her job.

She was diagnosed with adjustment reaction with mixed emotional features, generalised anxiety disorder and obsessive-compulsive disorder and granted an invalidity retirement.

"The illness is a direct result of the conduct of [the supervisor] in the workplace and in breach of the Act," her statement of claim states.

The Tax Office failed in October in an effort to have the case thrown out as an abuse of process, or transferred to another court and its former employee is due to have her day in court in April.

A judge also ruled last month that Ms Ilijevski had no chance of proving that her treatment at the ATO contravened the contentious section 18c of the Racial Discrimination Act.

But the case will go on after the Federal Circuit Court judge brushed aside ATO claims that the taunts Ms Ilijevski allegedly suffered from a supervisor between 2006 and 2012 were no more than "mere slights".

"I do not agree with the [Commonwealth's] assertion that the acts complained of...do not rise above mere slights," judge Suzanne Jones wrote.

"This may be the ultimate conclusion of the Court, however it is not something that I could reasonably find in the absence of the evidence upon which the [Commonwealth] relies."

But several of Ms Ilijevski's pleadings were thrown out, including the claim that the ATO was in breach of the controversial section 18c of the RDA.

Judge Jones found the former public servant could not satisfy the requirement that behaviour in breach of 18c must take place in public.

"There is not a scintilla of a suggestion that the public has access ... to the Australia Taxation Office workplace," Judge Jones wrote.