TPB updates breach reporting guidance following industry feedback

First, the TPB updated its information sheet surrounding false and misleading statements, TPB(I) 45/2024. It sought to clarify circumstances where tax agents would be required to take action versus ‘further action’ when they believed a statement made to the TPB or ATO was materially false or misleading.

The TPB said it had provided additional clarity regarding the interaction of the false or misleading statements obligation with other Code obligations, particularly relating to the requirement to act in the best interest of clients and maintain confidentiality.

The updated guidance clarified that notifying the TPB or ATO about a false or misleading statement provided to them, or notifying another registered tax practitioner in response to an ethical letter, would not be in contravention of confidentiality requirements, as tax practitioners had a legal duty to undertake such action.

It also provided more details regarding the application of whistleblower provisions in the context of the obligation to report false or misleading statements.

The board stipulated that registered tax practitioners could be eligible for tax whistleblower protections that commenced from 1 July 2024 under the Treasury Laws Amendment (Tax Accountability and Fairness) Act 2024.

The TPB said that eligible whistleblowers would have their identity protected from disclosure, except to authorised bodies, or with the whistleblower’s consent.

Next, the board clarified the scope of tax agents’ obligations to manage conflicts of interest when undertaking activities for the government, and maintaining confidentiality in these dealings.

In guidance TPB(I) 46/2024, the board stipulated that tax agents had an obligation to disclose material conflicts of interest to Australian government agencies, in relation to work undertaken for the agency. 

The updated information sheet clarified that this obligation extended to any other relevant person or entity’s conflict of interest, such as an employee or associate.

Finally, in TPB(I) 43/2024, the TPB clarified the circumstances in which tax agents would be required to report a significant code breach. The board reiterated that tax agents must err on the side of caution and make a report if they have reasonable grounds to believe a breach has occurred, even if they are not certain.

It also expanded on factors that agents could consider when deciding if a breach was ‘otherwise significant’ to be reported.