TOC (auto-generated)


Thank you for joining Ian Klug (TPB Chair), Michael O’Neill (TPB CEO/Secretary), Janette Luu (TPB acting Assistant Secretary) and Nadja Harris (TPB acting Director of Policy and Legislation) at the TPB Consultative Forum held on Thursday 2 December 2021. We appreciate your valuable input and have produced a summary below to assist your association with communicating key messages to your members.

Accreditation of professional associations (recommendation 4.2)

Proof of identity requirements - implementation

  • The TPB advised that after a 21-day consultation period with Consultative Forum members, and a 45-day public consultation period, the TPB has finalised the TPB Practice Note TPB(PN) 5/2021 Proof-of-identity requirements.

  • The TPB noted that the TPB and the Australian Taxation Office (ATO) initially planned to publish their respective requirements in December 2021, with the requirements becoming mandatory and enforceable from 1 July 2022. 

  • However, concerns have been raised that an implementation date of 1 July 2022 may be problematic, as it coincides with a particularly busy time for tax practitioners.

  • Forum members noted the following in relation to the implementation of the requirements:

    • Appropriate transitional arrangements for the requirements are important, to allow practitioners sufficient time to bring their internal practices up to date (for example, an extended implementation date of 1 July 2023).

    • The release of the requirements should be accompanied by a communications campaign to assist practitioners in understanding the requirements and the transitional arrangements that will apply.

    • Ideally, the release of the requirements should coincide with appropriate technological enhancements to reduce red tape, and utilise existing frameworks, such as MyGov and director identification number (director ID). 

    • The requirements should be released as soon as possible, to address uncertainty amongst tax practitioners and allow tax practitioners sufficient time to make appropriate changes, particularly smaller practitioners who may have limited proof of identity processes in place at present.

    • Standardised forms and processes should be considered to ensure consistency and avoid uncertainty.

    • The requirements should be consistent with the requirements under the Anti-Money Laundering Counter-Terrorism Financing Act 2006 and Anti-Money Laundering Counter-Terrorism Financing Rules

  • The TPB was asked why Code Item 1 (you must act honestly and with integrity) was included as a Code Item that may be contravened by tax practitioners failing to use appropriate proof of identity measures. The TPB confirmed that there is recent caselaw that supports the position that Code Item 1 not only requires tax practitioners to tell the truth, but to make enquiries to ensure that what they are telling the ATO (or other relevant agencies or regulators) is true.

Continuing professional education requirements - implementation

  • Following extensive consultation with the TPB’s Consultative Forum members, tax practitioners and the public, the TPB has finalised its continuing professional education (CPE) review, with the new CPE requirements to commence on 1 July 2022. 

  • The TPB announced its new requirements on 30 November 2021 with the publication of the new Explanatory Paper.

  • To support tax practitioners in understanding the changes and assist them as they transition to the new requirements, the TPB has developed an implementation strategy geared at providing tax practitioners with sufficient lead in time before the new requirements commence, as well as providing supporting material to assist tax practitioners to understand how the new requirements will impact them.

  • For example, the TPB has developed a number of products that will be released to support the release of the new Explanatory Statement (such as factsheets and frequently asked questions). The TPB will also be holding a webinar on 16 December, with further webinars to follow in 2022 as we approach the 1 July 2022 commencement date.

  • Consultative Forum members agreed to provide feedback received from members to the TPB so that the TPB can target its communications to address any concerns or misunderstanding within the tax practitioner population. 

  • The TPB noted that the CPE COVID-19 concession is still in place for tax practitioners, and that the new requirements will provide clarity to tax practitioners in relation to the types of activities that can count towards the CPE hours minimum. 

Tax Practitioner Governance and Standards Forum (TPGSF) – update from October meeting

  • Forum members noted that the last TPGSF meeting was held on 28 October 2021, with the following items discussed:

    • Charter of Tax Practitioner Governance

    • TPB and Professional Standards Council (PSC) Memorandum of Understanding (MOU)

    • TPGSF Work Program

    • James Review Recommendations (items for initial consultation)

    • proposed deregulation of tax (financial) advisers.

  • To assist in progressing the significant body of work before the TPGSF, a number of Working Groups have been established in relation to:

    • the development of the Charter of Tax Practitioner Governance

    • recommendation 4.3: Relevant experience

    • recommendation 6.1: Sanctions. 

  • The Key Messages arising out of the TPGSF meeting is available on the TPB’s website.

  • The latest review by PwC Skills for Australia of the FNS Financial Services Training Package was raised, particularly in relation to consultation by the review with the TPB and industry. 

TPB update

  • The TPB provided the following organisational update:

    • The TPB’s Board Conduct Committee (BCC) considered a total of 31 submissions between July and October 2021, which resulted in various sanctions being imposed, including 13 terminations.

    • The TPB currently has 89 active COVID compliance cases. Of the 89 active cases, 4 are currently under formal investigation. To date, 383 COVID cases have been closed, most without proceeding to a formal investigation. 24 of the most serious cases have now been presented to the BCC with various sanctions imposed, including suspensions and terminations.

    • The TPB is also in the process of designing a refreshed coordinated compliance strategy program with the ATO to ensure that both the TPB and the ATO have visibility and broad oversight over a range of higher risk and higher profile tax practitioner compliance matters.

    • The TPB and ATO have reached an agreement on a joint ATO-TPB Research and Development (R&D) strategy to ensure a joint and collaborative approach to the treatment of registered consultants/tax agents under the Tax Agent Services Act 2009 (TASA) who are providing tax advice on matters relating to the Research and Development Tax Incentive (R&DTI). There are approximately 50 cases currently within this program of work. 

    • The TPB also continues to work on several other high-risk unregistered preparer (URP) cases, including a matter where the TPB has recently written to 468 taxpayers with lodgments linked to an URP, advising that the URP is not registered with the TPB and advising them to seek assistance from a registered tax agent or the option to review their tax affairs with the Griffith University Tax Clinic who have partnered with the TPB. The TPB trialled a similar approach in the Van Stroe matter where the TPB collaborated with the Curtin University’s Tax Clinic to assist affected taxpayers. The TPB will continue to work with registered practitioners and the Tax Clinics in relation to high-risk URP matters going forward.

    • In August 2021, the Federal Court handed down its decision in relation to the contempt application brought by the Board against Kent Hacker and his company, One Stop Global Staffing Pty Ltd (OSGS). In particular the TPB noted that:

      • Mr Hacker and OSGS had previously been found liable for civil penalties under the TASA and in December 2020, the Federal Court imposed substantial civil penalties, permanent injunctions and a prison sentence relating to that conduct. 

      • Despite the permanent injunction, in January 2021, Mr Hacker and OSGS, whilst unregistered, lodged another two income tax returns for spouses for a fee. 

      • As a result, the TPB brought the contempt application and the Federal Court decided to imprison Mr Hacker for 7 months with Mr Hacker required to serve 5 months and the remaining 2 months to be suspended. 

      • The Court found that the contempt committed was a wilful, deliberate, and blatant disregard for the Court’s orders and could only be characterised as the most serious, criminal kind. 

    • Further, the TPB has filed a contempt application against Nathan Williams for breaching the interim injunction granted by the Federal Court on 18 June 2021 restraining him from preparing and lodging income tax returns for taxpayers for a fee or other reward whilst not a registered tax agent. Mr Williams admitted the breaches, and, by consent, on 13 October 2021, the Federal Court ordered that Mr Williams be adjudged guilty of contempt on seven occasions. The hearing on both the substantive and contempt application (to determine penalty) is scheduled for 21 December 2021. 

    • The TPB is continuing to develop its data science capability to inform its compliance program.

    • The TPB website has attracted over 325,000 visitors since the last Forum. Over 660,000 searches were performed on the TPB Register during this period.

  • In addition to the general organisational update, the TPB provided an update in relation to its compliance outcomes from 2020-21, and for 2021-22 so far, including:

    • The number of complaints received so far in 2021-22 have remained relatively constant over the last 3 years, approximately 2,000 cases per year. 

    • The TPB also closed about 2,000 cases last year, with 151 matters progressing to the BCC, resulting in 75 termination decisions.

    • The TPB was successful in the AAT during 2020-21, with the majority of Administrative Appeals Tribunal decisions affirming the TPB’s substantive decision, with variations only made to the length of the non-application period imposed. 

    • So far in 2021-22, the TPB has observed:

      • the number of complaints received has remained consistent 

      • the TPB currently has around 600 active matters on hand

      • more than 1,000 cases have been closed this year, slightly higher compared to this time last year. However, the TPB’s risk-based approach (that is, where only the highest risk matters are presented to the BCC) has seen a drop in BCC decisions, with only 31 matters resulting in the following sanctions: 

        • 13 terminations 

        • 4 suspensions 

        • 8 cautions. 

    • The TPB’s new Customer Relationship Management (CRM) system, called ‘Workbench’, is based on contemporary technologies and will assist the TPB to improve client self-service and deliver more targeted client engagement. This system change will improve the tax practitioners’ portal (known as My Profile on our website), with an update to user experience, security, and flexibility for future improvements.

    • The TPB’s Chief Technology Officer, Craig Woodburn delivered a presentation in relation to the implementation of Workbench, including timing, user experience and the TPB’s communications strategy to support tax practitioners with the change. It was noted that the Workbench User Group would not only provide feedback in relation to the useability of the new system, but also in relation to the TPB’s communications to tax practitioners. 

  • The TPB also provided Forum members with an update in relation to the development of the TPB’s strategic pillars heading towards 2024. Forum members indicated an interest in assisting the TPB in further developing its strategic pillars.

TPB policy update

  • The TPB provided the following policy update to Forum members: 

    • In relation to TPB Information Sheet TPB(I) 12/2012 Insolvency practitioners: Do you need to register as a tax or BAS agent, the TPB will undertake further consultation with relevant industry bodies to ensure that the Information Sheet provides adequate guidance in relation to pre-insolvency work and pre-insolvency professionals who may be required to register as a tax or BAS agent. 

    • The finalisation of Information Sheet TPB(I) D47/2021 Code of Professional Conduct – Acting honestly and with integrity will be delayed, in particular to await anticipated caselaw that will be informative in relation to the TPB’s position. The TPB will consult with Consultative Forum members in due course when it has had an opportunity to reconsider its position.

    • TPB will be seeking out-of-session Consultative Forum member feedback in relation to the following draft Information Sheets (noting that the TPB will take into account the end of year break in terms of timing):

Single Disciplinary Body update

  • The TPB provided an update to Consultative Forum members in relation to the transition of tax (financial) advisers and the establishment of the Single Disciplinary Body. 

  • The TPB noted that from 1 January 2022, tax (financial) advice services can only legally be provided for a fee by the following: 

    • a registered tax agent;

    • a qualified tax relevant provider; or

    • where a tax (financial) advice service is provided on an entity’s behalf by another person (such as the licensee or authorised representative), that other person is a registered tax agent or a qualified tax relevant provider; and

    • a legal service provider. 

  • Under a temporary carve-out, individuals (who are not financial advisers/relevant providers), partnerships and companies who were previously registered as tax (financial) advisers can continue to provide tax (financial) advice services from 1 January 2022 to 30 September 2022 without being a registered tax agent.

  • The TPB also provided an update in relation to its communications plan to affected tax (financial) advisers, and sought Forum member feedback, noting that so far, the TPB has received minimal enquiries from tax (financial) advisers in response to the communications that have issued. 

  • Forum members requested that the TPB’s table, included in the Consultative Forum agenda papers, outlining the differing impacts of the reforms on tax (financial) advisers depending on their individual circumstances, is made publicly available. The TPB agreed to publish this information on the TPB’s website

ATO update

  • The ATO provided the following organisational update:

    • The ATO will continue to provide support to the community, particularly noting the continued impact of the Covid-19 pandemic and the commencement of Australia’s natural disaster season. 

    • Kath Anderson is replacing Sylvia Gallagher in the Engagement and Support role within the ATO. 

    • In response to the issue raised about the visibility of client income tax account balances and debt payment arrangements by registered BAS agents, the ATO will follow up, noting that the two key considerations in relation to this issue are legal and technological. 

    • In relation to the Australian National Audit Office’s (ANAO) audit of the administration of the R&DTI, the audit report (available here), found that:

      • the administration of the R&DTI has been largely effective

      • the ANAO found that the ATO, Industry Innovation and Science Australia and the Department of Industry, Science, Energy and Resources “had largely effective performance monitoring, reporting and evaluation arrangements” 

  • Any additional enquiries in relation to the outcome of the audit can be raised through the ATO’s Tax Practitioner Stewardship Group. 

  • The ATO’s system maintenance schedule over the close down period was raised, and Forum members were advised that scheduled system maintenance can be accessed on the ATO’s website

Other business

  • The following items of other business were raised by Forum members:

    • The recognition of the legal status of registered tax practitioners, particularly by the ATO and Treasury, should be addressed going forward, so that this legal status is reflected in the ability of tax practitioners to represent their clients appropriately;

    • Forum members indicated that given the TPB’s work program and initiatives, there should be scope for the Consultative Forum to meet more than biannually. The TPB confirmed that it is open to facilitating additional ad hoc Consultative Forum meetings, should the need arise, and subject to sufficient matters being put forward for consideration and discussion by Forum members. It was agreed that Forum members would appoint a member to be the main contact point between Forum members and the TPB in terms of proposing matters for tabling at Consultative Forum meetings. 

  • It was noted that it was Elinor Kasapidis’ (CPA Australia) last Consultative Forum meeting, and that Bill Leung will be replacing Elinor as the representative of CPA Australia at future meetings. Elinor was thanked for her invaluable input and contribution to the Consultative Forum. 

Next meeting

  • Forum members noted that at this stage, the next Consultative Forum meeting will take place in July 2022, unless there is a need for an earlier meeting, in which case a meeting out of session can take place. 

Seasons Greetings

The Chair noted that we look forward to a brighter 2022. He thanked participants, associations, and through them the thousands of practitioners who have supported clients, the tax system and the community through these challenges. On behalf of the TPB, he wished everyone a safe and restful Christmas and the New Year season.

Last modified: 16 December 2021