New Tax Agent Services Determination Raises Concerns Among Professionals
The recent ministerial determination issued by Assistant Treasurer Stephen Jones has sparked debate among tax professionals and the Institute of Public Accountants (IPA), highlighting potential challenges for the Tax Practitioners Board (TPB) and concerns over the prescriptive nature of new obligations. Despite feedback from professional bodies, major concerns remain unaddressed, complicating the landscape for tax agents and practitioners ahead of the 2024 compliance deadline.
New Tax Code Obligations Stir Concern Among Tax Practitioners
In a move that has sparked widespread concern among tax professionals, the Assistant Treasurer Stephen Jones’s recent legislative instrument has introduced additional obligations for tax agents, which critics argue could complicate compliance and enforcement. The Institute of Public Accountants (IPA) has voiced significant concerns, stating that the Tax Agent Services (Code of Professional Conduct) Determination 2024, set to take effect from 1 August 2024, has not adequately addressed the issues raised by professional bodies during the consultation phase.
The Determination introduces eight new obligations under the Code, supplementing the existing ones. However, the IPA, through its general manager of technical policy, Tony Greco, has highlighted that these changes may undermine the principles-based approach of the current Code of Professional Conduct, introducing prescriptive requirements that could detract from its clarity and effectiveness.
One of the primary concerns raised is the potential overlap between the new and existing obligations, particularly regarding the prohibition of making false or misleading statements to the Tax Practitioners Board (TPB) or the Australian Taxation Office (ATO). Greco pointed out that the existing taxation legislation already covers this area comprehensively, and the new determination could complicate matters further.
Moreover, the determination mandates tax practitioners to disclose confidential client information to the ATO under certain conditions, a requirement that starkly contrasts with current legal standards which only compel disclosure under legal duress. This shift, according to Greco, could lead to inconsistencies with the legislated Code under current law, potentially putting tax practitioners in a difficult position.
The professional body has also expressed concerns over the broadened obligation for practitioners to report any matter that could significantly influence a client’s decision to engage them, a change from the original draft. This, along with the introduction of new ministerial powers to supplement the Code via legislative instruments—a move that bypasses the usual parliamentary scrutiny—has raised alarms about the potential for overreach and the challenges of compliance.
Despite these concerns, the Chair of the Tax Practitioners Board, Peter de Cure, has defended the new obligations, stating they align with the existing principles of honesty, integrity, independence, confidentiality, and competence. He urged tax practitioners to review their practices to ensure compliance, noting that while many already meet these standards, others will need to adjust.
The TPB plans to consult on draft guidance for the new Code obligations in the coming weeks, aiming to clarify the requirements and assist practitioners in navigating the changes. However, with the professional community already voicing opposition and concern over the impact of these and other recent changes to the ethical and professional conduct standards for tax practitioners, the path forward appears fraught with challenges.