The new legislation will see a single, strengthened whistleblower protection regime for the corporate, financial and credit sectors and create a new protection regime for reporting tax misconduct.
The new tax whistleblower regime is intended to encourage individuals to disclose information to the ATO on tax avoidance behaviour and other tax issues that previously carried no such legislative protection.
However, the new regime is not intended to encourage individuals to make frivolous or vexatious disclosures, or to disguise personal or professional grievances as disclosures qualifying for protection.
Key features of the new law will see eligible whistleblowers protected from civil, criminal and administrative liability in relation to a disclosure that qualifies for protection; the ability to remain anonymous and still qualify for protection; and making it an offence for a person to cause detriment to another person in relation to a disclosure that qualifies for protection.
All that is required is that an eligible whistleblower has reasonable grounds to suspect that the relevant information indicates tax misconduct and that it would assist the Commissioner or the eligible recipient in performing their duties if they knew about it.
Such information may include details of non-compliance with a tax law, tax evasion, a scheme set up to avoid tax, unexplained wealth, or any other tax-related misconduct.
This would not include information about purely workplace related issues that do not suggest misconduct or an improper state or affairs or circumstances in relation to the entity’s tax affairs.
Under the new regime, it will be an offence for a person to disclose an eligible whistleblower’s identity or information that is likely to lead to the identification of the whistleblower.
Accountants receiving whistleblower information
Gilbert + Tobin partner Muhunthan Kanagaratnam had earlier told Accountants Daily that there were a number of considerations for accounting firms to be aware of.
Tax agents, BAS agents, and auditors who provide services to an entity are included in the list of eligible recipients, meaning they can receive whistleblower information about their clients.
“When the information relates to clients, it can be tempting to on-disclose that information to the client, but this can expose the accountant or tax agent to criminal liability,” said Mr Kanagaratnam.
“They can be held criminally liable, with imprisonment of 6 months or 30 penalty units, or both, if they make an unauthorised on-disclosure that identifies the whisteblower, or is likely to lead to the identification of the whistleblower.
“So accountants and tax agents should educate their staff, establish a process by which whistleblower information is elevated to responsible senior personnel and establish a process for protecting the disclosure of the whistleblower.”
Protection for dobbing dodgy clients in
Former Tax Practitioners Board chair Ian Taylor said the new legislation will provide tax agents the ability to disclose information on unlawful clients without fear of breaching the TPB code item 6, ‘Unless you have a legal duty to do so, you must not disclose any information relating to a client’s affair to a third party’.
“That’s going to provide immunity, if you like, to people who do provide information to government authorities in relation to those people who are not acting within the law and the whistleblower legislation will provide immunity from the TPB taking action against you under the code item for providing information to the relevant authorities,” said Mr Taylor.
“If you were to dob a client in or an ex-client, or to dob in a potential client that you believe is not acting in accordance to the law, then you could have been in breach of the requirement to not disclose information without the client’s permission.
“You’re obviously not going to ask the client for permission to tell the Tax Office that they are not doing the right thing.”