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The recent amendments to the TASA determination have led to significant improvements from the original but will still force practitioners to make difficult decisions, tax expert John Jeffreys has cautioned.
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TASA determination ‘still problematic’ despite improvements, specialist warns
02 October 2024
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The exposure draft containing amendments to the Tax Agent Services (Code of Professional Conduct) determination has considerably improved the original obligations but will still be problematic for practitioners, tax expert and specialist John Jeffreys has cautioned.
In a recent article, Jeffreys noted that under the previously proposed section 15, practitioners would have been required to notify the ATO and TPB in situations where a client did not correct a false, incorrect or misleading statement (usually to the ATO) within a reasonable time.
"This was a direct challenge to the client confidentiality pact that tax practitioners have with their clients," Jeffreys said.
The exposure draft makes a significant improvement regarding when the notification must be given to the TPB or ATO, he said.
"Among other things, before notification is required, you must have reasonable grounds to believe your client’s actions have caused, are causing, or may still cause substantial harm to the interests of others. That will happen, but it won’t happen a lot," he said.
However, Jeffreys warned that the revised section still won't be easy for tax practitioners to comply with.
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"The new subsection 15(2) is a much longer provision that requires tax practitioners to form views about technical terms in the tax law that both the ATO, the AAT/ART and the courts struggle with. Further, the provision continues to use terms that tax practitioners will be in a quandary about," he said.
"Except in the most egregious of situations, every time a tax practitioner has to consider the application of proposed section 15, they will need to give considerable thought to what certain terms mean and whether they will apply to the client matter they are considering."
Jeffreys said Section 15 will see practitioners confronted with difficult decisions as to whether to withdraw from an engagement.
Item 3 of the proposed subsection 15(2) requires a tax practitioner to ‘withdraw from the engagement, and professional relationship, with their client, where the client has made a false or misleading statement and has been reckless as to the operation of the tax law.
"This is the provision that will provide the most severe conflicts and intense thought for tax practitioners. It is the provision that will give tax practitioners the most problems," Jeffreys said.
Jeffreys said practitioners will also have difficulty trying to decipher technical terms that don't have clear meanings to determine whether the obligations apply.
"The new proposed section 15 is an improvement on the former wording. However, there is no room for claiming some sort of victory for the tax profession with the new wording. In practice, it will be problematic."
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