ATO outage result of 'world first' HPE storage issue

The Australian Taxation Office (ATO) has called in its external service provider Hewlett Packard Enterprise (HPE) to help it resolve hardware issues that have been plaguing its online services, portals, and website since Monday morning.

According to ATO acting chief information officer Steve Hamilton, "specialist engineers" have been working through the night with ATO staff to rectify the outages.

"These outages relate to a new hardware storage solution that was upgraded in November 2015," Hamilton said in a statement.

"Our primary backup systems, that should have kicked in immediately, were also affected."

"We understand this is the first time this problem has been encountered anywhere in the world and we are working with HPE to determine the underlying cause."

As the ATO has been investigating the cause of the outages, Hamilton said the department has had to implement alternative recovery procedures that are taking longer to complete than expected.

Hamilton did confirm that the ATO's priority is fixing its critical systems such as the Tax Agent Portal and ato.gov.au.

"We have the right people with the right skills who are committed to restoring our services as quickly as possible," Hamilton added. "We apologise for any inconvenience our clients may have experienced."

Hamilton also confirmed that no taxpayer information has been compromised as a result of the outage.

The ATO has spent AU$700 million on computer software and hardware since 2011/12, according to its annual report. Most of the AU$34 million in consultancies spent over the past financial year also related to IT.

In 2010, the tax office selected HPE a preferred tenderer for its centralised computing bundle, beating out IBM to the deal.

At the time, the centralised computing contract was set to include the provision and support services for mainframe, midrange data warehouse, storage, and secure gateway, as well as data centre facilities, networks, and management.

The following August, the ATO appointed HP Enterprise Services Australia, IBM Australia, Accenture Australia, Capgemini Australia, and CSC Australia to a panel of vendors to provide the department with application development.

The length of the standing offer agreement was three years, with two one-year extension options attached, stretching the possible contract length out to 2016.

Revenue Minister Kelly O'Dwyer said on Tuesday that the ATO had advised her the problems were being rectified and confirmed the tax office would be undertaking a full investigation of its IT systems to ascertain how the event occurred.

Tax Institute president Arthur Athanasiou told AAP the problem was affecting not just taxpayers but external tax agents, as well.

"You can't rush to judgment against the ATO without knowledge of all the facts, but if the source of the prolonged failure is because of internal issues, such as defective hardware, the ATO must be better resourced to be able to ensure such failures don't occur, given the wide dependence on ATO systems by tax professionals and taxpayers," he said.

"We hope the ATO will ensure that taxpayers and agents will not be worse off as a result of the impact of this system disruption to their business."

Meanwhile, a report released on Tuesday by the Inspector-General of Taxation found tax practitioners had "met with significant difficulty in seeking compensation for losses" in relation to ATO system outages.

The report, stemming from a review into the taxpayers' charter and taxpayer protections, recommended the ATO provide internal review of compensation decisions where taxpayers can provide "new information or grounds which warrant the decision being reconsidered by a new and independent decision maker".

It also recommended ATO staff be trained in how to provide apologies, with the ATO agreeing to the recommendations in principle.

On Tuesday evening, the ATO said on Twitter its services had begun to return, however some users reported they where still experiencing issues.

With AAP

Updated 4.45 pm AEDT 13 December 2016: Added comments from Minister Kelly O'Dwyer and Tax Institute president Arthur Athanasiou, and information on the report by the Inspector-General of Taxation.

Updated 8.34 am AEDT 14 December 2016: Added ATO service update.