Termination of Tax (financial) Adviser registration - July 2016

Overview

The Tax Agent Services Act 2009 (TASA) was enacted to regulate the conduct of tax practitioners in Australia, ensuring that they meet the required professional standards and comply with their obligations under the law. The Act was introduced to address the problem of ensuring that tax agents operate with integrity and competence, thereby protecting the interests of taxpayers and maintaining the integrity of the tax system. The Act is overseen by the Tax Practitioners Board, which has the authority to terminate the registration of tax agents who fail to meet the necessary standards. The policy objective of the Act is to safeguard the public from untrustworthy or incompetent tax practitioners, thereby ensuring that the tax system operates fairly and effectively. The recent termination of the registration of Tax (financial) Advisers, such as Leanne Steen, exemplifies the Board's commitment to upholding these objectives by taking decisive action against those who do not adhere to the prescribed standards.

Scope and Application

The Tax Agent Services Act 2009 (TASA) governs the registration and conduct of tax practitioners, including tax (financial) advisers, throughout Australia. This Act applies to individuals and entities providing tax services, ensuring that they meet specific professional standards and comply with legislative requirements. The legislation operates at the national level, impacting tax practitioners across all states and territories in Australia. It mandates that tax (financial) advisers must be registered with the Tax Practitioners Board, and their registration can be terminated if they fail to meet the required standards, among other reasons. The termination of registration is a significant disciplinary measure, as evidenced by the case of Leanne Steen, whose registration was surrendered effective from 6 July 2016. While the Act sets out the primary obligations and scope of regulation, subordinate instruments and guidelines may further clarify or extend the application of the Act, providing additional context and detail on specific compliance issues.

Key Provisions

Under the Tax Agent Services Act 2009 (TASA), Section 40-10 (subsection 40-5) outlines the key provisions related to the termination of a Tax (financial) Adviser's registration. When the Tax Practitioners Board decides to terminate a registration, it must notify the affected adviser and the public through a formal announcement. This was evidenced in the case of Leanne Steen, whose registration was terminated effective from 06/07/2016, and Rosemary Holloway, who served as the Secretary of the Tax Practitioners Board at the time. The reason for the termination of Leanne Steen's registration was due to her surrender of the registration, as stated in the official gazette notice (C2016G01241). The Act imposes specific obligations on the Tax Practitioners Board and the registered Tax (financial) Advisers. The Board is responsible for ensuring that advisers comply with the standards and codes of professional conduct set out in the Act. Advisers, in turn, must maintain their professional competence, act with integrity, and provide services in accordance with the law. The Board can impose conditions on a registration or cancel it if the adviser fails to meet these obligations. Breaches of the Act or its regulations can result in various penalties and consequences. For instance, Section 133 of the Act provides for criminal penalties, including fines of up to $21,000 for individuals and $105,000 for bodies corporate, as well as imprisonment terms that may extend to five years. Additionally, the Board can issue infringement notices for minor or technical breaches, with penalties up to $2,100 for individuals and $10,500 for bodies corporate. Furthermore, Section 134 allows for civil penalties, including pecuniary penalties of up to $126,000 for individuals and $630,000 for bodies corporate, as well as potential disqualification from holding a registration. The Act also includes provisions for the review of decisions made by the Tax Practitioners Board. Section 170 allows for internal reviews by the Board itself, while Section 171 provides for external reviews by the Administrative Appeals Tribunal. These review mechanisms ensure that any termination of registration or other disciplinary action is fair and legally sound. This layered approach to oversight helps maintain the integrity of the tax advisory profession while protecting the rights of both advisers and the public they serve.