The Institute of Public Accountants (IPA) is advocating the extension of legal privilege to tax advice provided by registered tax agents.
Calls for legal privilege to be extended to tax advice
IPA chief executive officer Andrew Conway said Australia must follow the lead of other progressive industrialised nations such as the USA and the UK and extend legal privilege to tax advice.
“Consumers seeking independent and objective taxation advice must have access to legal protections and safeguards, whether they seek that advice from a lawyer or an accountant,” he said.
“Extending legal privilege would enable honest and open conversations between tax payers and their tax agents,” added Mr Conway.
In 2007, the Australian Law Reform Commission recommended the establishment of tax advice privilege to protect advice given by independent professional accounting advisors. In April 2011, the government issued a paper entitled Privilege in relation to tax advice but has so far failed to make any recommendations.
“Seven years of inaction since the Law Reform Commission’s recommendation is quite unsatisfactory,” said Mr Conway. “The IPA recommends a model to extend legal privilege to registered tax agents who are members of professional accounting associations.
“These members are qualified accountants who have undertaken further studies, hold a practising certificate and are held to higher professional and ethical standards than non-members,” he said.