TPB treads fine line with new tax agent rules

The Tax Practitioners Board has pledged to interpret contentious new code of conduct rules to protect consumers without affecting practitioners’ privacy or their ability to practice.

In a packed-out webinar this week, TPB chair Peter de Cure repeated the board’s promise to practitioners that forthcoming guidance would be “practical and pragmatic”.

“The TPB team are working under real time pressure and working very, very hard and are doing their best to give you practical and pragmatic guidance on how we're going to implement the new requirements,” he said. “Be patient with us.”

The TPB’s webinar on Wednesday attracted unprecedented interest from the industry, with registrations maxing out its 5,000-attendee capacity.

The industry will rely on the TPB’s interpretation and guidance to resolve unsettled issues with the determination made by Assistant Treasurer Stephen Jones at the start of last month.

Small accounting and bookkeeping businesses have feared the additional workloads created by record keeping, quality management and supervision obligations would be costly and onerous to implement.

Professional bodies like CA ANZ have also said concerns around client disclosure and reporting remain despite Jones postponing the start date of the rules until next year.

But the TPB chair said the new obligations were “genuinely consistent” with the code's existing key principles and broader objectives.

“Our immediate focus is working with you to provide guidance, to go through a consultation process, to educate you in practice … and really to genuinely support the vast majority of you who do the right thing day in and day out,” de Cure said.

Minor and personal issues will not require disclosure

De Cure stressed practitioners’ client disclosure obligations related to “significant matters” and did not extend to immaterial or personal issues.

He said a minor breach of the Tax Agent Services Act (TASA) would not require disclosure.

“That's like getting a speeding ticket in your car,” he said.

“It's something we want you to pay attention to and do something about and perhaps correct a little bit of behaviour, but it's not something you would need to talk to a client about.”

It was also “crystal clear” practitioners would not be required to advise clients about their personal religious beliefs, sexual preferences, social club or political party memberships, he said.

“What we're talking about is matters that relate to your tax practice,” he said, adding that when it came to physical or mental health matters that affected practitioners’ fitness to work, “you should probably think about whether you're going to continue to practice, rather than take on new clients”.

Obligations to protect consumers

Matters that would require disclosure were serious sanctions like a suspension or a termination.

“These obligations are about consumer protection, and we will be interpreting them in a way that does not invade your privacy and shouldn't challenge your ability to practice,” he said.

The TPB would be considering practice sizes when assessing compliance with obligations around supervision and quality management systems.

“When we're looking at these things, we will be taking into consideration that those sorts of systems, policies and controls will be different for a big end of town firm than they will be for a sole practitioner,” he said.

“Let me assure you that we'll look at the real circumstances of your practice.”

TPB still ‘working through’ details

The TPB also confirmed guidance on practitioners’ eight new obligations would be rolled out in three stages.

Consultations on false statements, conflicts of interest, and confidentiality began this week, with guidance due in late September. Record keeping, competence and quality systems would be addressed in late August, with guidance by early November.

Consultation on the final tranche, upholding ethical standards, would start in September, with guidance expected in November.

De Cure said this meant the TPB was still “working through” details on several fronts, including the timeframe for practitioners to notify the ATO of clients’ false or misleading statements.

He suggested a window of “no more than 28 days”, though the board was also considering a shorter five-day period.

“I think our current example is within five days. We realise that that's a pretty tight timeframe, but it's in everybody's best interest to do it as quickly as humanly possible,” he said.

The TPB was also working to clarify transitional rules, including how to define firm sizes for when the now-postponed rules would apply.