Inspector-General of Taxation Karen Payne has admitted her office is powerless to protect whistleblowers, calling for changes to better safeguard those who disclose information.
Former Australian Tax Office staff lashed the watchdog's management of their claims, during a Senate inquiry on Friday.
Richard Boyle, who exposed the tax office's instructions to use more heavy-handed debt collection tactics on taxpayers who owed money, alleged through a written submission there were serious deficiencies in the inspector-general's investigations of his claims.
He said the inspector-general had erroneously concluded debt recovery officers could not have been told to issue five garnishee notices in their last hour of overtime as they calculated it would take on average 25 hours to complete such a request.
"In the [inspector-general's] view, the facts and evidence indicate that this could not have been intended literally. This conclusion ... is patently incorrect and inconsistent with the observations or capacity of this author, and their former colleagues, to issue enduring garnishees at speed," Mr Boyle said.
Ron Shamir - who told the inspector thousands of tax refunds had been cancelled without telling the taxpayer why - said he was promised protection for making a disclosure but was hung out to dry.
"The result for me has been absolutely devastating. For me and my family. I have not worked since I was terminated by the Tax Office and my family and I have been living in poverty for the past four and a half years," Mr Shamir said.
"I'm told by experts I'll probably never work again and I believe that had the inspector general of taxation done their job and afforded me the protections that I was promised then I may not be in this situation that I am in today."
But Inspector-General of Taxation Karen Payne said her office was not set up to accept whistleblower complaints.
"The office of the inspector general of taxation's statutory framework is not designed to allow whistleblowing to our agency," Ms Payne said.
"We are only able to offer limited protections. We are not able to offer whistleblower protections for example from either professional or personal reprisal."
What limited protection the inspector-general could provide was only available when the commissioner of taxation has first approved the information being made available, she said.
"Finally we do not have unlimited or unfettered access to ATO systems and personnel. Our restricted access is only available when there is an investigation and only within the terms of reference and for the purpose of that investigation and then only to some ATO systems," Ms Payne said.
Allowing the inspector-general to receive whistleblower complaints would be a decision for government, Ms Payne said.
But if there was "one factor we could improve about our operating environment", it would be to bring in better whistleblower protections, she said.
"In summary the protections provided for those who complain or disclose should ideally match the disclosure of information that is deemed to be in the public interest," Ms Payne said.
"In my view this question is fundamental to the integrity, independence, impartiality, accountability and performance of the [office]."
Meanwhile private sector whistleblower protections have "leapfrogged" safeguards for public servants reporting wrongdoing, Griffith University professor AJ Brown told a separate inquiry into press freedom.
The head of the Centre for Governance and Public Policy's public integrity and anti-corruption research program said there was a "crying need" and "clear opportunity" for the public interest disclosure scheme to be reformed in this term of government.
The scheme affords public servants who report wrongdoing in their agency certain protections.
But Professor Brown said the test for when whistleblowers could take their complaint public was "complicated, inconsistent and ... too onerous" compared to new protections for corporate whistleblowers.
"The whole private sector regime, having lagged behind, has now leapfrogged the public sector regimes," Professor Brown said.
Professor Brown said the whistleblower complaint from a member of the US intelligence community that President Trump pressured pressured Ukrainian President Volodymyr Zelensky to launch an investigation involving presidential candidate Joe Biden and his son Hunter could not have happened in Australia.
"Not in a way that is legally recognised and protected under the public interest disclosure whistleblowing regime," Professor Brown said.
National security and intelligence whistleblowers can only make reports to the Inspector-General of Intelligence and Security, with no trigger for public disclosures.
In the US, there's an "automatic trigger" for the matter to be raised with the corresponding congressional oversight committee, from where it can be made public.
Professor Brown said it was in the interests of government to have functioning disclosure schemes, to "contain" information.
"An effect of a well-working scheme will be to minimise the number of things that need to go public because if it works then people do disclose, will disclose and will be supported and protected and better managed internally ... without the need for it to be out there publicly in the first place," he said.
"To use the Trump example again, one suspects that the CIA officers who were the notetakers in the situation room would probably have felt less of an obligation to raise the concern if it wasn't for the fact they were aware that the records of these particular conversations were being treated differently than they should have been, that they were being put on secret servers and whatever to be hidden. If they were going through the right channels then I suspect it would have been a different sort of story."