The Australian Tax Office is considering outsourcing some of its work by letting big public companies use their own auditor to sign off on their tax affairs.

Draft documents reveal the ATO is consulting on a plan to let companies with an annual turnover of between $100 million and $5 billion use a so-called External Compliance Assurance Process.

The Tax Office would select the matters that would qualify for the new system, and it says they would focus on "matters of fact".

The Tax Institute's Robert Jeremenko says the plan would reduce costs for businesses and the government.

"If it's done in an appropriate way, and there are appropriate controls around it, it's a very good thing and the Tax Office shouldn't shy away from considering outsourcing in some areas where, to be frank, the expertise doesn't lie within the Tax Office," he said.

"These company auditors are very familiar with the company accounts, so why not try and tap into that?"

The documents reveal there are concerns about whether the ATO will be able to ensure the "integrity, objectiveness and competency" of the auditors.

One requirement would be that the external reviewer must not have provided tax advice to the company involved.

The inspector-general of taxation, Ali Noroozi, says it is an idea worth trialling.

"In my view, it's probably something they should at least try, given the fact that even with their current level of staffing or past level of staffing there's often been audits that have taken way longer than they should," he told The World Today.

"But they need to make sure there are correct boundaries drawn between what is OK to be outsourced and what should still be done in house within the Tax Office."

Mr Noroozi has told The World Today he will investigate if problems arise.

Peter Ryan's interview with Ali Naroozi can be heard on The World Today from 12:05pm on ABC local radio and Radio National.