The Dob-In Rules for tax agents contain a lot of grey.
Dob-In Rules for Tax Agents
In this episode, Andrew Henshaw of Velocity Legal in Melbourne will walk you through the changes to the Tax Agent Services Act 2009 (in short, ‘TASA’) and discuss the new Dob-In Rules for tax agents with you.
Here is what we learned, but please listen as Andrew explains all this much better than we ever could. These show notes only give you a fraction of what we discuss in this episode.
To listen while you drive, walk or work, access the episode through a free podcast app on your mobile phone.
Dob-In Rules for Tax Agents
The changes to the Tax Agent Services Act 2009 and the Ministerial Determination cover three areas:
a – Tax and BAS agents reporting themselves (para 30-35 (1)(ba), (2)(ba) and (3)(ba) TASA)
b – Tax and BAS agents reporting other tax and BAS agents (para 30-40 TASA)
c – Tax and BAS agents reporting clients (para 15 (2) TAS Determination)
James Review
Further below, we will walk you through the timeline of how the dob-in rules came about, but for now, let’s start with the James Review, which was announced on 5 March 2019.
Its purpose was an independent review of the effectiveness of the TPB and the TASA to ensure that tax agent services (TAS) are provided to the public per appropriate professional and ethical standards.
The Final Report released on 27 November 2020, listed 28 recommendations. The Government supported 20 of the recommendations in full, in part or in principle.
Five of these recommendations form Tranche 1. And four form Tranche 2.
Code of Professional Conduct
Until the James Review, the Code of Professional Conduct contained 14 Code items in s30-10 of TASA.
The changes to TASA in the form of the 2023 No. 1 Bill (Tranche 1) deal with five issues:
1 – Disqualified entities,
2 – Ministerial power to determine Code under s30-12 TASA
3 – Original code items in s30-10 TASA (on 2 July 2024)
4 – Keeping clients informed (s45 TAS Determination)
5 – Disqualified entities (ss 30-10 (15) and (16) TASA)
Covering:
- Honesty and Integrity
- Independence
- Confidentiality
- Competence
- Other Responsibilities
30 Days
Reporting obligations for registered tax practitioners apply from 1 July 2024. The breach must have occurred on or after 1 July 2024 to be a reportable defence. You have 30 days to notify the TPB or your professional association from when you became aware or ‘ought to have become aware’ of a ‘significant breach’.
Significant Breach
What does ‘significant breach’ mean? The TPB has released the following guidance on breach reporting obligations in draft form: TPB(I) D53/2024 Breach reporting under TASA 2009;
In paragraphs 32 to 34, the guideline outlines what a significant breach means, but there is no clear-cut line. It all depends on the particular case, facts, and circumstances.
Timeline
Just in case you are interested in the timing of the different legislations around the dob-in rules, here they are:
Before 2010, there were just state-based tax agent boards. Each state did its own thing.
The Tax Agent Services Act (26 March 2009) commenced on 1 March 2010, and all went well for almost ten years.
In April 2016, the ATO heard first whispers that companies avoided the new (1 January 2016 start date) Multinational Anti-Avoidance Law (MAAL). The ATO commenced an investigation, referring the matter to the Australian Federal Police (‘AFP’) around March 2018. About a year later, AFP and ATO decided there was not sufficient evidence to pursue a formal investigation.
Three years later, on 5 March 2019, the government appointed Mr Keith James for the now-famous ‘James Review’ (discussion paper), which issued its final report on 31 October 2019. The government responded to the James Review on 27 November 2020.
Why do we give you these dates? We want to show you how fast things started moving once the stone started rolling.
Tranche 1
On 18 November 2022, the Treasury implemented its ED legislation (Tranche 1) as the Government’s response to the Review of the Tax Practitioners Board.
The TPB suspended Peter Collin’s tax agent registration for 2 years in December 2022. And that was when the details of the PwC tax scandal began to filter out into the media.
On 16 February 2023, Treasury introduced the 2023 No. 1 Bill (Tranche 1).
In the same month, the Australian Federal Senate referred an inquiry into the management and assurance of integrity by consulting services to the Senate Finance and Public Administration References Committee.
In May 2023, The Australian Financial Review (‘AFR’) reported on a cache of internal emails that showed the PwC Australia tax partner Peter Collins had been leaking secret government tax information to partners and staff at PwC.
On 15 November 2023, The Greems tabled an amendment to 2023 No. 1 Bill agreed to by Senate (Tranche 1) regarding ‘dob in’ obligations of significant breaches by other tax agents, which received Royal Assent on 27 November 2023.
Tranche 2
On 6 August 2023, the government announced new measures around promoter penalties, whistleblower protection, TPB reform and information sharing (Tranche 2).
The TAF Bill covering Promoter penalties, whistleblower protection, TPB reform and information sharing (Tranche 2) was introduced on 16 November 2023 and received Royal Assent on 31 May 2024.
On 10 December 2023, a draft instrument (Determination) with a draft Explanatory Statement was released. The Final instrument covering 8 additional obligations under Code of Conduct was registered (Determination) on 2 July 2024.
Determination 2024
On 9 September 2024, (Measures No. 1) Determination 2024 registered re-revised commencement dates on additional obligations under the Code of Conduct for tax agents with 100 employees or less.
On 8 October 2024, (Measures No. 2) Determination 2024 registered re-revised client ‘dob in scenarios’ and events which tax agents need to report to clients/respective clients.
So this is where we are now: 1 November 2024, when we recorded this interview, and 2 December 2024, when this episode was approved to go live. We only touched the iceberg here. Please listen to the episode since Andrew goes into a lot more detail.
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