Enforceable Undertakings (EUs) may become a fact of life for tax practitioners within an array of strengthened sanctions being considered for the Tax Practitioners Board (TPB).
The Government-initiated review of the TPB has canvassed the use of EUs alongside, at the highest level, giving the TPB the ability to permanently ban tax practitioners.
The review noted that the Australian Taxation Office (ATO) had been supportive of the TPB being given a broader range of sanctions and had noted that part of the so-called “individual’s tax gap” was attributable to poor behaviour by some tax practitioners.
Further it said that both the ATO and the TPB itself had highlighted how high risk tax practitioners had ben able to avoid sanction.
“Higher risk tax practitioners are able to circumvent the investigation process and avoid disciplinary action through voluntarily deregistering before a formal investigation commences,” the TPB review said.
It said that Tax Agent Services Act also did not have a mechanism for treating the close associates of tax practitioners in the same way as a practitioner and that the ATO had “highlighted instances where certain persons closely associated with a de-registered or unregistered tax practitioner operate as a proxy of the de-registered or unregistered practitioners”.
The review said the TPB had suggested that the suite of sanctions it could use were insufficient in targeting and changing particular tax agent behaviours.