Yes, emails can be kept and retained electronically provided they are readily accessible and able to be retrieved as required.

Registered tax practitioners must retain the records for at least 5 years after the tax agent service has been provided. In this situation, we would consider a tax agent service to have been ‘provided' from the date the service is considered complete. 

When a service has been completed will depend on a number of factors, including the scope of the engagement. We encourage you to reconfirm or review your engagement with ongoing clients regularly (preferably annually) so you can easily determine when a service has been provided, and a new service has commenced.

While it is not necessary to duplicate the general accounting records of a client you obtained or used to provide a tax agent service, you should consider retaining duplicates of records to the extent they are required to demonstrate the nature, scope and outcome of the tax agent service provided.

There is no set formula for determining the sufficient number of registered individual tax practitioners a partnership or company is required to have to satisfy this requirement. 

In determining the adequacy of the nominated sufficient number, we will consider things, such as:

• having adequate resources available (including financial, technological and human resources) to provide the tax agent or BAS services and to carry out supervisory arrangements
• maintaining the competence to provide tax agent or BAS services
• ensuring the registered individual tax practitioner responsible for the supervision and control is fit for purpose, that is, they are adequately trained and competent, to provide the supervision and control
• ensuring the registered individual tax practitioner responsible for the supervision and control only supervises tax agent or BAS services they are registered to provide
• size and scale of the tax agent or BAS services provided within the business (for example, turnover, number of clients and number of relevant staff)
• the type and complexity of tax agent or BAS services being provided and supervised
• number of qualified and experienced staff
• the number of qualified tax relevant providers responsible for overseeing the supervisory arrangements
• the frequency of appropriate training and development activities for all relevant staff
• the level, type and complexity of technology or software used, including network security protocols in place and digital monitoring and review processes
• risk management processes and procedures, including the use of delegated supervision processes
• the supervisory arrangements in place (for example, quality assurance and control practices and escalation procedures)
• any conditions imposed by us on the entity’s registration based on the qualifications and experience of its staff.

The extent of internal controls, including reviews of quality management systems, will differ significantly between tax practitioners based on the:

• size of individual practices
• level of day-to-day engagement by a tax practitioner on the tax agent services being provided
• complexity of the services being provided
• complexity of the clients’ tax affairs.

We recommend regular periodic reviews of your quality management system to ensure it remains effective and up to date.

A sole tax practitioner without staff is still required to document, maintain and enforce internal controls, however these may be tailored and scaled as appropriate to their circumstances and the services they provide.

Internal controls may include:

• physical controls over filing cabinets
• a process for verifying the identity of a client and conducting proof of identity checks
• conducting a conflict of interest check prior to engaging or re-engaging a client
• regularly updating software to ensure information remains secure and confidential.

You must exercise your professional judgment in determining the appropriate extent of internal controls for your circumstances.

A letter of engagement serves as an important and effective mechanism for documenting the agreement between a registered tax practitioner and their client about:

• what records need to be kept
• who needs to keep those records.

The letter of engagement should also include:

• information regarding your record keeping obligations under section 30 of the Determination
• the client’s record keeping obligations under tax laws as well as information regarding the consequences for clients of not keeping adequate records.

We don't have a specific clause, however we encourage you to check with your recognised professional association as they may have a template you can use. 

Please refer to our guidance for more information on letters of engagement.

You should maintain a contemporaneous record (for example, a checklist or a file note) to demonstrate that proof of identity steps were completed.