The Institute of Public Accountants (IPA) has called for an extension of legal privilege around the provision of tax advice provided by registered tax agents.
The IPA made its position clear today, with its chief executive, Andrew Conway saying it was time for legal privilege to be extended to such areas as advice so as to bring Australia into line with other progressive industrialised nations such as the US and the United Kingdom.
Conway noted that in 2007, the Australian Law Reform Commission had recommended the establishment of tax advice privilege to protect advice given by independent professional accounting advisers from the coercive information-gathering power of the Commissioner of Taxation.
As well, he noted that in April 2011, the Government issued a paper entitled "Privilege in relation to tax advice" but had failed to make any recommendations.
"Seven years of inaction since the Law Reform Commission's recommendation is quite unsatisfactory," Conway said. "Consumers seeking independent and objective taxation advice must have access to legal protections and safeguards, whether they seek that advice from a lawyer or an accountant."
He said that extending legal privilege would enable honest and open conversations between tax payers and their tax agents.
"The IPA recommends a model to extend legal privilege to registered tax agents who are members of professional accounting associations," Conway said. "These members are qualified accountants who have undertaken further studies, hold a practicing certificate and are held to higher professional and ethical standards than non-members."
