Give TPB more powers says CPA Australia

8 July 2019

Major accountancy group CPA Australia has called for the Tax Practitioners’ Board (TPB) to be given greater powers to sanction tax agents including banning orders.

In a submission filed as part of the Federal Treasury’s Review of the TPB, CPA Australia had also acknowledged the changing nature of what falls under the jurisdiction of the TPB including financial advisers, noting that professional standards need to strike a balance between those agents who provide relatively simple services and those providing services for corporations or financial planners for high wealth individuals.

However, it was on the question of TPB sanction powers that the CPA Australia submission is most forceful noting that in the past two years, only 41 agents have been terminated and three suspended out of 3,000 complaints.

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“As a consumer protection agency, the TPB should be provided with greater ability to sanction agents who have been reported to them, especially if independent complaints are made on an ongoing basis related to a single practice or agent,” it said.

“Further, the TPB’s administrative sanctions do not include pecuniary penalties. This removes the ability of the TPB to influence agent behaviours through the imposition of fines. The Tax Agent Services Act 2009 (TASA) civil penalty and injunction provisions are, in the main, focused on conduct prohibited without TPB registration,” the submission said.

CPA Australia noted that, since its inception in 2009, the TPB had brought 13 cases before the Federal Court and been the respondent in 21 other cases claiming such cases were costly and in the main dealt with unregistered individuals operating outside of the regulatory environment.

“CPA Australia supports the consideration a broad range of interactions, interventions and disciplinary actions including preventative approaches such as visiting high-risk agents or banning orders preventing a sanctioned individual from working with or for a tax practitioner,” it said.

The submission said increased referrals from the Australian Taxation Office (ATO) were a positive step and the pathway should be further developed.

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What is the status of a tax agent?
A tax agent is not an agent of the Tax Office. A tax agent is not a law enforcement officer.
A tax agent's primary duty is carry out his client's instructions, provided those instructions are not plainly unlawful.
If a tax agent becomes aware beyond a reasonable doubt that a Tax Return is incorrect, he cannot lodge it. If he does so, he is complicit in a crime. However if he is aware only on the balance of probabilities that a Tax Return is incorrect, informed opinion is that he would be able to lodge the Return. In such a case, the circumstances would not support a criminal charge against the tax agent. It should be evident that it is knowledge of a proposed crime that makes an accomplice liable. For example, a customer goes into a hardware store and buys a blowtorch. Another customer comes into the hardware store and tells the shop assistant that he wants a blowtorch to assist in carrying out a burglary. The assistant cannot sell it to him.
A tax agent has no power to disallow an expense claimed by his client. All he can do in such circumstances is to put his livelihood on the line and refuse to carry out his client's instructions.
The accuracy of a Tax Return or financial statement is only as good as the accuracy of the information received from the client by the tax agent. A tax agent cannot assume responsibility for work over which he has no control.
A tax agent who starts advising his clients on "how much they can get away with" is engaging in illegal activity.
A tax agent cannot investigate his client without his client's consent. If he examines his client's records without his consent, he can be sued for trespass.
The agency tasked with the enforcement of taxation law is the Australian Taxation Office. They have the responsibilty and the associated power to amend any incorrect Tax Returns received by them.
Tax agents should ensure that they are not made the scapegoat for the criminal activity of clients. On the other hand, if a tax agent counsels or knowingly aids and abets the creation and lodging of false Tax Returns, he should be subject to the full force of the law.
When taxpayers are aware that the Tax Office will accept almost any claim without question, the result is that they will apply intense pressure to tax agents to make false claims on their behalf.

TPB is quite unnecessary for financial advisers, particularly since the advent of FASEA. Yet it seems that in stretching into areas where they aren't needed, TPB has lost focus on its core role. The obvious solution is to remove any responsibilities for financial advisers from TPB and let them get back to basics.

As financial advisers are now forced to pay money to TPB to explain that income protection premiums are tax deductible. Maybe Accountants should be forced to have financial planning degrees and be registered as advisers with ASIC for all the financial advice they give on superannuation and investing.

Oh no. Accountants have accounting degrees and are all totally ethical so lets just let them give advice without the extra costs which will be passed on to clients, and making them do SOA's would also be too costly so lets just leave them unregulated and un policed. After all, they charge a fee for service so how could their advice be poor and against the best interests of clients?

Setting up an SMSF with a loan and with one asset class (property) is a great financial decision.

ha ha so funny if it weren't true.

the irony is that the accounting bodies believe this and are asking fasea to recognize their prior financial advice giving experience (sans the license of course)

hopefully FASEA will reject them and give them 1 x credit for tax advice, which in all fairness, they do deserve but only if they are also a registered tax agent

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