TPB crackdown: Decade-long bans and new penalty powers

In its statement, Treasury said: “We’re introducing a stronger sanctions framework including criminal penalties for unregistered tax preparers, new civil penalties for breaches of the Code of Professional Conduct, and increased penalty amounts.”

It noted that these amendments are intended to drive better behaviour and deter misconduct to address issues raised by the PwC tax leaks scandal. It also addresses recommendations from a 2019 review of the TPB.

In a conversation with Accountants Daily, taxation and superannuation adviser Letty Chen said that through the proposal, the TPB would only be able to enforce its proposed interim registration suspensions if there is a significant risk of material loss or damage to the client or revenue.

She said that the IPA welcomes Treasury’s measures as a step to hold practitioners to account for misconduct. 

“These people [bring] the tax profession to disrepute as [and] these new sanctions actually give the TPB more flexibility to decide on the sanctions that are actually appropriate to the circumstances.”

In the face of amendments, Chen said that those who do the right thing will not be impacted by any new punitive rules.

“[The amendments are] really about dealing with the unregistered [preparers], and the other part of it's really sanctions for registered [accountants who are] wrongdoers.”

“Those who are doing the right thing [don't] need to do anything more.”

“Time will tell as to how these apply, and assuming that these rules do pass … We are waiting on the TPB for guidance on how they will administer the rules, the definition of certain terms, and, in particular, the circumstances in which they may apply each of these new sanctions,” Chen said.

Accountants Daily also spoke with Box Advisory Services founder Davie Mach, who said that over more than 18 years in the profession, he has seen the damage that poor behaviour by some practitioners can do to small businesses, the economy and the profession’s reputation.

“Being a registered tax practitioner is a privilege, and there must be a strong expectation that advisers uphold professional standards, follow the Code of Professional Conduct, and act with integrity,” Mach said.

While Mach told the masthead that these stronger penalties are important for misconduct deterrence, dealing with unregistered tax preparers, and protecting trust in the profession, he said that accountability should be shared across the entire system, including larger firms, organisations, and government bodies

“If you are looking at increasing the penalties on just one group, I think this will create injustice and unfairness within the economy,” Mach said.

“These reforms are part of a range of actions to increase community confidence in the integrity of the tax system, including the Government’s consultation on the regulation of accounting, auditing and consulting firms in Australia,” the Treasurer said in their address.