In a media release on Thur 20.8.2020, the TPB unveiled its 2020-21 corporate plan in conjunction with its 10th anniversary, outlining its purpose, vision and values for the coming year. TPB Chair, Ian Klug AM in his introductory message spoke to the importance of the profession’s role in upholding the integrity of the tax system as well as implementing government reform initiatives.
See below for details.
In a media release on Thur 20.8.2020, the TPB unveiled its 2020-21 corporate plan in conjunction with its 10th anniversary, outlining its purpose, vision and values for the coming year. TPB Chair, Ian Klug AM in his introductory message spoke to the importance of the profession’s role in upholding the integrity of the tax system as well as implementing government reform initiatives. “The way we achieve our purpose, as set out in this plan, includes supporting honest practitioners, who make up the large majority, through registration services, complaint resolution, investigations of alleged misconduct and, where appropriate, sanctions,” Mr Klug said.
Recently I wrote about the TPB’s structural impediments to ‘independence’ being seen to be done – through not hiring its own staff (instead, taking ATO secondees for almost all of its staff) and not leasing its own premises (instead, occupying ATO space). I opined that this compounded concern, amongst tax practitioners, that the Board was not operating as an effective bulwark against the ATO’s program of referring ‘tax agents’ for lack of compliance with their own tax affairs’. Visible independence would be an important in this regard (acknowledging that there will be times when loss of registration could warrant loss of livelihood). My article produced a flood of vies and comments on ‘LinkedIn‘ (as of right now, 3,153 views and 24 comments).
With this in mind, I looked through this ‘Corporate Plan’ with interest. In introduction, the Chair writes:
In 2020–21, we will have an increased focus on unregistered advisers and the highest risk practitioners. This year, we expect to complete 1,000 investigations. Sanctions—such as suspensions and terminations—will be imposed after review and decision by our independent board. Sanctions on misconduct support community confidence in the integrity of the system and provide a deterrent to misconduct.
It is difficult to know, from this, what priority the TPB will be giving sanctioning registered agents for failures in their own tax compliance alone. There is a ‘slide’ in his comments.
- He starts off by talking about ‘unregistered advisers and the highest risk practitioners and then moves to mention 1,000 investigations (benign enough on its own).
- But the only ‘sanctions’ he talks about are ‘suspensions and terminations’ of the registration of persons already registered as ‘tax agents’. I NOTE that this is not relevant to the first target he mentions – ‘unregistered advisers’ (where ‘civil penalties’ are the primary sanction).
- He does not expressly refer to the level of attention the TPB proposes to give, to agents who’s only failing is with compliance in their own tax affairs. Tax Practitioners (especially those who watch the TPB’s emails to agents and the AAT challenges to deregistration) know that a significant proportion of the challenges are for failure to comply with their own tax affairs alone.
- He then talks about ‘sanctions’ on misconduct ‘supporting community confidence in the integrity of the system‘. If he means the ‘tax system‘, this raises some alarm bells, as ‘integrity of the tax system’ is one of the commonly cited rationales for including ‘compliance’ in your own tax affairs, as an element in the tax agents’ Code of Practice, breach of which can result in ‘suspensions and terminations’ (see for instance the comments of Deputy President McCabe, in Bell v TPB, in para 20, where Mr McCabe said: “Mr Bell’s behaviour undermines the integrity of the system of self-assessment.”  AATA 2424).
- The Chair then goes on to mention that it is an ‘independent board’ who decides these cases, and the sanctions, if relevant. The Board is structurally independent, but they are part-time and very dependent on the material presented to them by the full-time staff, particularly if the submissions to the Board Compliance Committee are voluminous. It is those full-time staff who are the ATO secondees.
Speaking personally, I’d like to see information about:
- The ATO’s criteria for referring a registered agent, to the TPB, for failure to comply with their own tax affairs alone.
- The numbers of investigations the TPB launches into – (a) unregistered agents; (b) registered agents for failures in client work (and the types of failures); (c) registered agents for failures in compliance with their own tax affairs alone.
- The percentages of these that survive challenge.
If this material is available (somewhere I’m not aware of) I’d like to know.
Hopefully concerns of this nature are receiving the attention of the Keith James review of the TPB and TASA.
[LTN 161, 20/8/20]