Lawyers advising on tax matters have been shut out of the ATO advice service, that they provide to ‘tax agents’ – a thing which the compulsory ‘first layer’ insurer for lawyers, in Victoria: Legal Practitioners Liability Committee (LPLC) thinks is retrograde. They wrote an email (in Aug 2022) to the Law Institute of Victoria (LIV), suggesting they raise this with the ATO, because it was creating risk that they had to insure and it was unfair. They explained that it is important for lawyers, advising clients, to have evidence that they have sought the ATO’s views and a record of what it was.
The closure of this service is galling, to those of us who, a decade ago, negotiated a bespoke ‘P2P’ (practitioner to practitioner) advice service, via the ATO’s ‘Legal Practitioners Round Table’ consultation group. The arrangement was that we had a contact, in the ATO, who would find the right person, in the ATO, to deal with a technical query, and that other person would revert to us. This ‘triaged’ service was closed down, and folded into the ‘tax agents’ service. The ‘Round Table’ was then closed down. And now, it seems, lawyers are excluded from even this advice (lite) service. This appears to be the ‘final nail in the coffin’.
The LIV Tax Committee considered this problem, at its 16.11.22 meeting, and resolved that LIV officers and some Committee members would raise this issue, with two ATO officers, with whom they’d made contact, whilst dealing with the ATO’s draft protocol for claiming ‘legal professional privilege’ (LPP). The LIV made submissions, which included no-name examples of ATO officers acting badly, with regard to LPP, which brought out some senior officers.
We wish the LIV delegation well, in their ’tilt’ to fix this problem.
[Edited version of the Aug 2022 LPLC email to the LIV]
Dear Law Institute of Victoria,
After making some enquiries with the ATO earlier this year, on 4 February 2022 I found the following information on the ATO website:
You can seek help via Online services for agents if you are representing a client in a professional capacity as a tax agent, legal practitioner or intermediary.
This is the link to the information: https://www.ato.gov.au/General/ATO-advice-and-guidance/ATO-advice-products-(rulings)/Early-engagement-for-advice/Small-business-advice/
However I checked the link this morning and the ATO has removed the reference to use by a ‘legal practitioner’. This is the new wording:
You can seek help via Online services for agents if you are representing a client in a professional capacity as a tax agent or BAS Agent.
Please add this to the list of issues to raise with the ATO. I have in the past regularly told lawyers to use the online service for agents so that they can get a written reply from the ATO. From a risk management perspective, I think it is best practice to have a written reply from the ATO to keep on the file. I have also suggested practitioners use this form because they have told me of the time they have wasted, un to an hour on hold waiting to speak with someone at the ATO.
Other lawyers have told me they tell their client to engage a tax agent to get a written response form the ATO using the online form. However it does not seem fair that lawyers cannot use this service and I don’t understand why the ATO does not want lawyers to use this service.
Perhaps you could remind the ATO that it is the lawyers who are collecting the billions of dollars in GST and CGT, at property settlements, on behalf of the ATO. You could suggest, to the ATO, that they should pay lawyers, for this service, rather than leaving it to their clients.
Regards
Legal Practitioner’s Liability Committee