From 1 July 2024, tax practitioners will have additional breach reporting obligations. There are 2 types of breach reporting requirements:

• Firstly, self-reporting: you must notify us in writing if you have reasonable grounds to believe that you have breached the Code of Professional Conduct (Code), and that breach is a significant breach. 
• Second, reporting another tax practitioner: if you have reasonable grounds to believe another tax practitioner has breached the Code and the breach is a significant breach, you must notify us, and the recognised professional association of the other tax practitioner (if applicable), in writing.

Check out our guidance for more information.
 

Breach reporting will apply to breaches that occur on or after 1 July 2024.

Like with any complaint that is made to us, we will do everything we can to maintain your anonymity. If this sort of scenario is of concern to you, we ask that when you do make a breach report, that you bring your concerns to our attention, and we will work with you to ensure we protect your identity. 

A significant breach of the Code is a breach that: 

• constitutes an indictable offence, or an offence involving dishonesty, under an Australian law 
• results, or is likely to result, in material loss or damage to another entity (including the Commonwealth)
• is otherwise significant, including taking into account any one or more of the following:
  • the number or frequency of similar breaches by the tax practitioner
  • the impact of the breach on the tax practitioner’s ability to provide tax or BAS agent services
  • the extent to which the breach indicates that the tax practitioner’s arrangements to ensure compliance with the Code are inadequate; or
• is a kind prescribed by the Tax Agent Services Regulations 2022 (TASR).

Determining if a breach of the Code is a ‘significant breach’ must be decided on a case-by-case basis, having regard to the particular facts and circumstances.

We want to assure you that any malicious, vexatious or frivolous reports made to us will be taken very seriously and we may take action against anyone making such breach reports.

The intent behind this measure is to enhance the integrity and community confidence in the tax profession and tax system more broadly. As a registered tax practitioner, you are not expected to be an investigator of other tax practitioner misconduct. You will be expected to report when you have reasonable grounds to believe that a significant breach has taken place. Ultimately it benefits the profession as a whole if unprofessional or inappropriate conduct is dealt with appropriately.

Under Code item 6, tax practitioners must not disclose information relating to the affairs of a client or former client, to a third party unless they have obtained the client’s permission, or they have a legal duty to do so. Notifications to us and recognised professional associations under the breach reporting regime may involve the disclosure of client information. However, as these disclosures are required by law, they will generally be covered by the legal duty exception. As such, breach reporting disclosures will be compliant with Code item 6. This is subject to any information, including client information, being protected by legal professional privilege.

Learn more about confidently of client information.
 

Breach reporting must be made using:

• the 'online complaints’ form if the breach relates to the conduct of another tax practitioner; or
• the 'notify a change in circumstances’ form if the breach relates to their own conduct. 

All breach notifications, whether they are self-reported or about another tax practitioner, must be reported to us (and the professional association if applicable) within 30 days of the day you first have (or ought to have) reasonable grounds to believe there has been a significant breach of the Code.

We will triage breach reports as we do with any other complaints. We make further enquiries regarding the complaint that has been made, including verification of information provided to us by the complainant to try and assess the accuracy of the information provided to us.

A failure to comply with any of the breach reporting obligations from 1 July 2024 is a breach of: 

• the Taxation Administration Act 1953, which may carry criminal sanctions; and
• the Tax Agent Services Act 2009 (TASA), specifically Code item 2, which requires tax practitioners to comply with the taxation laws in the conduct of their personal affairs. 

As with any breach of the TASA there are a number of sanctions we can apply, including:

• a written caution
• an order
• suspension of registration 
• termination of registration (including a period within which a terminated tax practitioner may not re-apply for registration).

Find out more about the sanctions we can impose.