TPB provides clarity on timeline for reporting breaches

The Tax Practitioners Board (TPB) has confirmed that tax practitioners do not need to report any breaches by themselves or other practitioners where they occurred before 1 July 2024.

TPB chair Peter de Cure provided further information on some of the confusing areas with the breach reporting obligations that commenced on 1 July 2024 in a recent webinar.

The obligations require tax practitioners to notify the TPB if they or another registered tax practitioner has breached the code and the breach is significant.

“The breach reporting obligations apply in relation to breaches that happened on or after 1 July 2024 so you don’t have to go back into the inner history looking for breaches or breaches that you knew about,” de Cure said.

“It’s a breach that happened on or after 1 July 2024, applying from that date.”

IPA general manager of technical policy, Tony Greco, said this is welcome clarification from the TPB with some practitioners previously concerned they’d be required to report breaches from before 1 July 2024, particularly where they had been identified after 1 July.

“It has eased some concern because practitioners previously thought ‘well what about all these prior breaches that I’ve done nothing with?’”

“They now understand that they don’t have to go back into history and analyze all the things they’ve seen, observed or heard about, but certainly for breaches occurring from 1 July there is an obligation.”

With some practitioners confusing the start date of the breach reporting obligations with the commencement date for the obligations in the code determination, the TPB also reminded practitioners of the dates for each set of obligations.

“No matter what size your practice is, the breach reporting obligations started for everybody from and including 1 July 2024. That’s now six and half months ago,” de Cure said.

“The application date for the code determination matters set out under section 15 [of the determination] on false and misleading statements started from 1 January 2025 for large firms with 100 or more employees and starts from 1 July 2025 for smaller firms.”

De Cure said while the two sets of obligations have different commencement dates, they will often “work hand in hand” once the section 15 obligations begin to apply.

“The breach reporting obligations relate to all the other items in the code,” he said.

“This includes section 15 [of] the Minister’s determination in relation to making or preparing, or directing somebody else to make or prepare, false or misleading statements.”

A false or misleading statement would be regarded as a significant matter, particularly where it has resulted from a failure to take reasonable care, recklessness or an intentional disregard of the law by a registered practitioner, De Cure explained.

“Where this is the case, the tax practitioner is clearly obligated to report to the TPB under the breach reporting requirements and clearly has obligations under Section 15 of the Code determination to take the required action in relation to that false or misleading statement.”