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Accountants and tax agents have been urged to take note of their obligations under the incoming tax whistleblower regime, including possible criminal liability if they identify whistleblowers to their clients.
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Accountants warned ahead of whistleblower regime
18 October 2018
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The Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 was introduced in Parliament in December 2017 and if passed, will see a single whistleblower protection regime covering the corporate, financial and credit sectors.
Speaking to Accountants Daily, Gilbert + Tobin partner, Muhunthan Kanagaratnam said that despite the stalling of the bill in parliament, there were a number of considerations for accounting firms to be aware of.
Tax agents, BAS agents, and auditors who provide services to an entity are included in the list of eligible recipients, meaning they can receive whistleblower information about their clients.
“When the information relates to clients, it can be tempting to on-disclose that information to the client, but this can expose the accountant or tax agent to criminal liability,” said Mr Kanagaratnam.
“They can be held criminally liable, with imprisonment of 6 months or 30 penalty units, or both, if they make an unauthorised on-disclosure that identifies the whisteblower, or is likely to lead to the identification of the whistleblower.
“So accountants and tax agents should educate their staff, establish a process by which whistleblower information is elevated to responsible senior personnel and establish a process for protecting the disclosure of the whistleblower.”
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Dobbing clients in
The Tax Practitioners Board chair, Ian Taylor, had earlier said that the new legislation would afford protections to agents who disclose information on unlawful clients without fear of breaching the TPB code item 6, ‘Unless you have a legal duty to do so, you must not disclose any information relating to a client’s affair to a third party’.
“That’s going to provide immunity, if you like, to people who do provide information to government authorities in relation to those people who are not acting within the law and the whistleblower legislation will provide immunity from the TPB taking action against you under the code item for providing information to the relevant authorities,” said Mr Taylor.
“If you were to dob a client in or an ex-client, or to dob in a potential client that you believe is not acting in accordance to the law, then you could have been in breach of the requirement to not disclose information without the client's permission.”
Mr Kanagaratnam said that while the bill suggests some protection would be afforded, it was not “expressly clear”.
“The whistleblower regime is embodied within the Taxation Administration Act and it is not expressly clear that the reach of the protections is intended to extend fully to other legislation, such as the Tax Agent Services Act and the Code of Professional Conduct,” said Mr Kanagaratnam.
“There is helpful guidance in the explanatory memorandum to the bill that suggests at least some protection will be afforded. Tax agents who wish to make a disclosure should seek carefully considered advice at the time.”
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