IPA urges TPB to address ‘information vacuum’ on register
The Tax Practitioners Board must improve the availability of information about tax agent misconduct to assist practitioners with the new disqualified entity laws, the association says.
The Institute of Public Accountants has urged the Tax Practitioners Board to enhance the information about disqualified entities on the TPB register or create separate register to more easily identify a disqualified entity.
Under new obligations that have applied since 1 January, registered tax practitioners must not employ or use the services of an entity to provide tax agent services if they know the entity is a disqualified entity and the TPB has not provided approval.
The TPB issued draft guidance on the new laws in relation to the new requirements relating to disqualified entities in TPB(I) D52/2023.
In its submission to the draft guidance, the IPA noted that the TPB has limited powers to publish information on the TPB Register, particularly in relation to the 12-month time limit for disclosing when a tax practitioner has had their registration terminated or details imposed on an entity.
“This creates an information vacuum where practitioners and the public are not privy to information held by TPB relating to disqualified entities, especially in circumstances where practitioner misconduct has been identified more than 12 months ago, but less than five years ago,” the accounting body said.
“To assist practitioners with their assessment of employing or using a disqualified entity, the TPB should enhance the TPB Register to include a disqualified entity flag or establish a separate register that more readily identifies a disqualified entity.”
The IPA said that the TPB should also alert practitioners to the fact that search results on the TPB Register may be limited.
It has also called for further guidance to practitioners on the factors that need to be addressed to satisfy their obligations under the new code items under the Code of Professional Conduct, Code 15 and Code 16.
The submission also stated that further information is required on the range of entities used or employed by registered tax practitioners.
“Paragraph 11 of D51 points to paragraph 3.30 of the Explanatory Memorandum relating to Treasury Laws Amendment (2023 Measures No. 1) Bill 2023. Both documents acknowledge that there is a broader range of entities who are likely to constitute entities that are ‘used’ or ‘employed’ by a registered tax practitioner to provide tax agent services beyond the more common and non-exhaustive list which includes employees, associates, and contractors,” it said.
Further guidance should be provided in D51 to assist practitioners in understanding the scope of this obligation.
“For example, where a practitioner uses work by an employee/contractor of a client or the client themselves, where one of those parties is a disqualified entity, does Code Item 15 apply?” it said.
The IPA said there also needs to be further information on what steps need to be undertaken in relation to outsourcing or offshoring arrangements.
“Does Code 15 apply to employees/ contractors of affiliate firms overseas that provide input to a multinational taxation assignment relating to a client based in Australia,” it said.
