Termination of tax agent registrations - April 2020

Overview

The Tax Agent Services Act 2009 (TASA) was enacted by the Commonwealth Parliament to address issues in the tax agent industry by ensuring that only suitably qualified and competent individuals and entities are registered as tax agents in Australia. The Act establishes a regulatory framework to maintain and enhance the professional standards of tax agents, aiming to protect the public interest and maintain the integrity of the tax system. The policy objective of TASA is to ensure that tax agents provide services with integrity, competence, and diligence, and to safeguard the interests of taxpayers. Recently, the Tax Practitioners Board, the body responsible for administering TASA, has terminated the registrations of several tax agents due to various reasons such as surrender of registration or failure to meet registration requirements. Additionally, some registrations have been suspended due to breaches of the code of professional conduct. This ongoing regulation ensures compliance with the standards set forth by the Act, thereby upholding the integrity of the tax system and protecting consumers from potentially unscrupulous practices.

Scope and Application

The Tax Agent Services Act 2009 (TASA) applies to tax agents and tax (financial) advisers in Australia, encompassing individuals, entities, and companies involved in providing tax services. The Act's jurisdiction is Commonwealth-wide, regulating the conduct and registration of tax agents to ensure compliance with professional standards and to protect consumers. The legislation allows for the termination, suspension, or cancellation of registrations based on reasons such as surrender of registration, failure to meet registration requirements, or non-compliance with the code of professional conduct. The Tax Practitioners Board, established under the Act, has the authority to administer and enforce these provisions, including the power to extend or restrict application through subordinate instruments. The Act does not specify exclusions or thresholds but operates under a framework designed to maintain integrity and competency within the tax profession.

Key Provisions

The primary provisions of the Tax Agent Services Act 2009 (TASA) pertinent to the termination and suspension of tax agent registrations are found in subdivisions 40-A and 30-B, respectively. Section 40-A (subsections 40-30 and 40-35) allows the Tax Practitioners Board (TPB) to terminate the registration of a tax agent if they have surrendered their registration (section 40-30) or if they have otherwise ceased to meet the requirements for registration (section 40-35). Section 30-B (subsections 30-10 and 30-15) provides the TPB with the authority to suspend a tax agent’s registration if the TPB believes that the tax agent has failed to comply with the code of professional conduct or other requirements under the Act (sections 30-10 and 30-15). The obligations and requirements imposed by the Act on tax agents are multifaceted. Tax agents must ensure they maintain their professional qualifications and adhere to the code of professional conduct outlined in the Act. They must also meet ongoing education requirements and promptly notify the TPB of any changes in their circumstances that might affect their eligibility for registration. In addition, tax agents are required to act with integrity and competence when providing tax services to their clients and to maintain accurate and complete records of their activities. Any failure to comply with these obligations can lead to the termination or suspension of their registration. Under the Act, breaches of the conditions of registration can result in various civil and criminal consequences. Section 10-10 of the Act allows the TPB to impose fines on tax agents who fail to comply with their obligations, with the maximum penalty varying depending on the severity of the breach. In more serious cases, the TPB can refer matters to the Australian Taxation Office or to the courts for further action, which can lead to criminal charges and penalties. For instance, section 10-20 of the Act outlines the penalties for tax agents who engage in fraudulent or dishonest conduct, with maximum fines and imprisonment terms specified for such offences. It is important for tax agents to be fully aware of their obligations under the Act and to take proactive steps to ensure compliance. Failure to do so can result in the suspension or termination of their registration, with potential financial and reputational consequences. Moreover, ongoing education and adherence to the code of professional conduct are critical for maintaining their registration and avoiding penalties under the Act.