Published on the 08/10/2026 | Written by Heather Wright

Identity hurdles remain before agent-to-agent tax is reality…

The Australian Taxation Office is preparing for a world where individual’s personal agents will handle tax returns, talking to other agents via the government ecosystem – though CIO Mark Sawade admits there are still plenty of hurdles to overcome first, not least the issue of ‘Know your agent’.

Sawade says the ATO has spent decades improving how citizens interact with services through websites, apps and online portals, but AI may fundamentally change that model.

“If we’re not thinking about how we get there and the types of building blocks we’ll need to put in place, it’ll be an incredibly long time before we’ll be ready.”

Speaking at the recent Gartner IT Symposium, he pointed to the transformation of individual tax returns as an example. In the 1990s, taxpayers collected a TaxPack from the post office and typically spent seven to eight hours completing a return. Today, you can download the ATO app with MyID or access through MyGov and file a return for simple tax affairs in roughly 12 minutes.

The next leap, he suggests, may remove even that interaction.

“We’ve often thought about it through the lens of create an app or create a portal or, in the myGov sense, how do we bring together the set of federal government services that can be accessed together”

“[But] we will be in a world where we’ll be eventually talking to our personal agent saying, ‘it’s now mid-July, can you please just fill out my income tax return?’,” and the personal agent will talk to one or more other agents through the government ecosystem.

Sawade says the agency wants to reduce the cost and effort involved in business tax compliance, with a long-term vision of making tax obligations increasingly seamless and automated.

“We focused on the way the individual interacts with our government services to try and make that increasingly more seamless and that gets a whole range of better outcomes, both for individuals, taxpayers, and the economy broadly. Our focus now is how do we do that for business and how do we get that same type of step change so that the cost of business in terms of complying with tax obligations is equivalently reduced and tax just happens [as a] far more seamless and automated process.”

The future could see AI agents managing routine interactions, collecting information, preparing submissions and interacting with government systems without human involvement in every step.

It’s a similar story across at Services Australia, where deputy CEO and chief customer officer Jonathan Thorpe says agents could potentially do a ‘fairly good job’ of organising government information around specific individual’s circumstances.

“Certainly we’re seeing – and I think anyone would attest to this in most industries – that increasingly customers are experimenting with agents in their everyday life.

“Increasingly, we’re going to have to think about what that means in the context of government service delivery. I think we’ll start to see it – perhaps we already are – in the simple way people bring content together, organise government information around their personal circumstances, and potentially an agent could do a fairly good job of that.”

The challenge of know your agent

But both Thorpe and Sawade are clear that identity, accountability and trust are central problems still needing to be solved.

“Where it starts to run into a lot of trouble really quickly is proving who someone is, or know your agent,” Thorpe says. “At the moment we don’t have the plumbing necessary for agentic identity, particularly in the consumer and citizen space.

“I think we’ll solve it, but it’s not here yet,” he says, adding its something he thinks about ‘a lot’ in the context of MyGov.

Another ‘big challenge to solve’ is the issue of liability and responsibility. If an agent submits incorrect information or misunderstands instructions, clarity will be needed around who is accountable for the outcome.

“What happens if you set up an agent [but] you didn’t quite set the appropriate guardrails? What’s government’s responsibility in that interaction?”

Sawade too, is clear that we’re still a long way from agent to agent communications through government systems, pointing to identity as a key issue to solve.

“But if we’re not thinking about how we get there and the types of building blocks we’ll need to put in place, it’ll be an incredibly long time before we’ll be ready to have government services that are safely, securely and transparently interacted with in that way.”

Humans at the helm

Both emphasised the need to focus on outcomes, governance and accountability before introducing advanced automation.

At the ATO, that means balancing enthusiasm for AI against the reality that the organisation manages one of Australia’s largest repositories of personal and business financial information. Sawade says its approach is deliberately measured and designed around strong controls, governance and human accountability.

The ATO has ‘tweaked’ the commonly used concept of keeping a ‘human in the loop’ and instead talks about keeping a ‘human at the helm’ reinforcing the idea that a person must remain accountable for outcomes even as AI capabilities expand.

Services Australia is taking a similar position, with Thorpe saying he doesn’t see AI as a replacement for people: “I see AI as an opportunity to evolve that service and make it better, not replace it,” he says, noting agentic AI’s best role may be in assisting staff.

“I don’t think its in front of our staff, I think it’s actually behind it – how AI can support public servants to do a better job and better inform the community about what obligations, payments and services are available to them.”

That could take the form of an agent assist providing the right information as prompts to someone to connect them to the right service.

“Some of these things we’re looking at now as we transform our contact centre, but I’m not seeing it as something you’d have in front of a customer service representative, particularly in the types of things that we do.”

In a separate session, ATO assistant commissioner, strategy, design and architecture Jimmy Tzimopoulos noted that while agentic AI in particular can achieve a lot of user cases ‘just because you can, doesn’t mean you should’.

“When we really assess the different use cases, we might find that 90, 95 percent of them could be achieved through some form of re-engineering of process and then driving business automation, then maybe some machine learning and then a bit of agentic at the end or at a component of it. But there’s a tendency to say, I’ll just get it all done by agentic.

“And I think that’s the thing for us that we’re learning about.”

He noted the need to enable people to learn that while they can achieve things with agentic, you don’t necessarily have to look at agentic from start to finish. “Let’s look at how we can compartmentalise it to really deliver the right solution that considers the commercial impact as well.”