Proposed laws to do away with secrecy rights of rogue tax agents

Rogue tax agents won’t be able to depend on secrecy provisions in laws to prevent disciplinary action being taken against them for ethical breaches by their associations if proposed laws pass federal parliament.

Treasury has issued amendments to laws for public comment that would permit the Australian Taxation Office (ATO) and the Tax Practitioners Board (TPB) to provide protected information to another agency or a professional disciplinary body where a person or organisation is suspected of breaching a breach of law or ethical standards.

Secrecy provisions were blamed by agencies for their inability to share certain information related to the PwC leaks scandal. This resulted in the long wait for the breach of confidentiality and a breach of the code of professional conduct in the tax agent laws to be dealt with by the TPB.

A professional body such as a disciplinary committee run by an accounting association is unable to receive certain kinds of information from either the TPB or the ATO about the alleged conduct of a member if it is protected information.

The explanatory memorandum for the information sharing amendments says that current law does not provide a way for regulators to give accounting or other professional bodies information that would enable them to investigate and discipline a member for a breach of ethics.

An existing disclosure exemption could not be used by agencies to help associations protect consumers by dealing with rogue members doing the wrong thing.

“Previously, there was no general principle that would allow disclosure to relevant professional disciplinary bodies simply because the ATO or TPB had evidence of legal or ethical misconduct by members of the relevant body,” the explanatory memorandum says.

“The limited situations were only where disclosure would fall under existing disclosure exceptions (e.g. the performance of duties exception). This prevented professional associations from receiving information which may have enabled them to pursue disciplinary actions against their members where they were not otherwise aware of the behaviour.”

Existing practices also mean that professional bodies with tax agents as members find out about misconduct only after the Tax Practitioners Board has disciplined a member.

Chartered Accountants Australia and New Zealand welcomed the proposed change to secrecy laws that would permit them to act on members suspected of behaving badly.

Head of advocacy for CA ANZ, Simon Grant, said there will be matters for professional bodies to consider with the new proposals.

“It will raise important issues for members of bodies such as CA ANZ and the operation of the associations’ professional conduct committees,” Grant said. “Notably, however, the proposed secrecy law exceptions will need to be extended to also clearly cover professional body staff who receive and handle the information in undertaking those investigations.”

This article was first published by The Mandarin.