TPB’s interim suspension powers could lead to ‘devastating’ consequences: CPA

CPA Australia has raised concerns that the amending regulations and amending instrument for the Tax Practitioners Board (TBP) sanctions reforms are not consistent with the parliamentary intent of the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026.

The said bill is currently before the lower house and expands the TBP’s regulatory powers.

Under the new legislation, the TPB would be able to immediately suspend a tax practitioner’s registration without the need to commence or finalise an investigation into a suspected contravention of the TAS Act.

The government recently undertook consultation on the subordinate legislation that supports the bill, which includes draft regulations and a draft determination.

In its submission, CPA Australia said it was important that the interim suspension powers proposed under the amending bill match those within the amending regulations and instrument.

The professional body noted that the proposal at draft subsection 40–45 (2) would allow for suspensions of up to 90 days without applying the natural justice hearing rule.

"These two factors, together with the proposed requirements to inform clients of the interim suspension, will have a significant impact on a tax practitioner’s business and long-term reputation and potentially impact their clients’ ability to meet their compliance obligations," it said.

"For this reason, exercise of the power must be confined to the most exceptional circumstances as intended by Parliament."

The Explanatory Memorandum to the amending bill states that the TPB can only impose an interim suspension in response to "highly egregious behaviour and where the TPB is satisfied that the behaviour poses a risk of serious harm in the future to tax clients of the tax system".

However, CPA noted that the amending regulations state that:

"The TPB may […] suspend the registration of an entity […] on an interim basis where the entity has engaged in certain serious misconduct that may pose a risk to their clients or the integrity of the tax system."

"As drafted, the Explanatory Statement expands the circumstances in a manner which does not reflect Parliament’s intent and creates uncertainty about when the TPB may exercise this proposed new power," the submission said.

"The wording of the Explanatory Statement should be amended to align with Parliament’s intention by adopting the language used in the Explanatory Memorandum to the Amending Bill."

The submission also raised concerns about the publication of the interim suspension on the public register for the period of the suspension.

"Upon becoming aware of the interim suspension through the Register, clients and potential clients will immediately doubt the tax practitioner’s capability," CPA said.

"Again, we reiterate our call for the description of the high threshold to be met before interim suspension powers are used, as set out in the Explanatory Memorandum to the Amending Bill, be reflected in all associated explanatory statements, TPB guidance and in practice."

CPA said there was inherent danger in requiring the disclosure to clients of a suspicion rather than a proven outcome.

"Despite the position put forward in the Explanatory Statement that an interim suspension should not 'be taken as reflecting on a tax practitioner’s ongoing suitability to provide tax agent or BAS services', such disclosure is likely to have a materially damaging long-term impact on the tax practitioner’s business," it said.

"This would be particularly devastating where the concerns that led to the interim suspension are ultimately unsubstantiated."