IPA seeks legal privileges for tax advisers

The Institute of Public Accountants (IPA) has called on the Federal Government to extend legal privilege to tax advice provided by professional tax advisers.

Under current legislation, tax agents do not receive the same protection as lawyers, although they do advise on tax law.

The IPA argued such protection was long overdue, with the United States, United Kingdom and New Zealand having extended legal privilege to their professional tax advisers.

The IPA senior tax adviser, Tony Greco, said it was in the best interest of the public for professional tax advisers to have the same legal protections and safeguards as lawyers when it comes to tax advice.

“Consumers should be able to have frank and honest conversations with their tax accountant without worrying that their communications are not confidential and could be later subject to the Australian Taxation Office [ATO] oversight,” Greco said.

In 2007, the independent Australian Law Reform Commission recommended that privilege should be extended to tax advice created by an independent professional adviser who was a registered tax agent.

The IPA argued it was inconsistent that this class of professional advisers could not avail themselves of the same benefits as lawyers who provide legal advice and are granted the benefits of legal privilege.

“Tax practitioners are expected to provide professional advice to taxpayers; it is high time that the law reflected the importance of such advice and protected the parties in question,” Grego said.