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Issue 27 | September 2018 - Tax (financial) adviser edition

Message from the Chair

Improving your online experience
From next month the TPB will offer an improved experience for all tax practitioners using our online services to register and notify us that they continue to meet registration requirements. Along with these enhancements we are introducing improved online security measures, in alignment with Australian Government standards.

If you are a registered tax practitioner, the next time you log into My Profile you will notice a few changes. We will ask you to create a new username, more secure than your publicly available registration number, and a 10-character password that meets government standards.

If you forget your username or password, we will use two-factor authentication to provide an additional layer of security. That means we’ll send a code to the email address or mobile phone number we have on record (depending on your preference) to confirm your identity.

We are also introducing a new proof of identity process for all new registration applications, and for existing practitioners completing their annual declaration.

The good news is that as well as protecting the security of the information you provide to the TPB, the improved online forms are more responsive and easier to use.

In addition to enhancing your online experience and improving your security when interacting with us, we continue to provide further guidance and education to reinforce the importance of cyber security for your practice and clients.

Join us and the ATO for our special cyber-awareness webinar on Wednesday 24 October. We will talk about our new online security enhancements, and other steps you should take to protect yourself against cyber criminals and scammers. You'll also learn about your obligations in keeping client information safe, and notification of data breaches.

TPB welcomes new CEO
I am pleased to welcome to the TPB our new Secretary and Chief Executive Officer, Michael O’Neill.

A taxation lawyer with significant experience, Michael joins the TPB from the ATO where he was Chief Risk Officer, following senior leadership positions in investigations, advice, litigation and law reform.

We are working with Michael to continue to advance the interests of both tax practitioners and consumers of tax services.

Ian R Taylor
Chair, Tax Practitioners Board

CPE reviews begin

Work has begun on reviewing selected tax practitioners’ continuing professional education (CPE) records.

It’s still early stages but results so far show:

  • only 71% of tax practitioners comply with their CPE requirements
  • 25% are partially compliant, in that they have exceeded the 25% threshold for relevant technical or professional reading
  • 4% of tax practitioners are non-compliant
  • webinars are a popular CPE activity, with 42% attending webinars to maintain their knowledge and skills.
It’s important you maintain records and evidence of your CPE activities, including the details and hours completed. If your CPE is not currently up to date, you should endeavour to bring it up to date as soon as possible.

Failure to comply with our CPE requirements may lead to a formal investigation that could result in an administrative sanction. Sanctions available range from written cautions and orders, all the way to suspensions and terminations.

Learn more about our CPE requirements

Make sure your CAR is registered

Any entity that provides a tax (financial) advice service for a fee or reward needs to be registered with the TPB. This includes corporate authorised representatives (CARs).

If your CAR provides a tax (financial) advice service for fee or reward, part or all of which is payable via a third party, your CAR will also need to be registered. In most cases a CAR is considered to provide tax (financial) advice services if they have an ASIC authorisation to provide financial product advice or to deal with a financial product.

Find out more about who needs to register as a tax (financial) adviser

Registration terminated: failing to comply with personal tax obligations

As a registered tax practitioner, you must comply with your personal tax obligations. This is not only an obligation under the Code of Professional Conduct, but also a consideration in determining if you are fit and proper person to be registered.

The Board Conduct Committee (BCC) recently found a tax practitioner had not only failed to comply with their personal tax obligations, but also that of a company of which they were a director and a trust of which they were a trustee. The practitioner and associated entities had outstanding income tax and BAS returns for several periods. The practitioner had also failed to ensure the associated company complied with its superannuation guarantee obligations.

Considering the egregious nature of the tax practitioner’s conduct, the BCC terminated the practitioner’s registration and prohibited application for registration for five years.

Tax agent suspended for incorrect work-related expense deductions

The BCC recently suspended a registered tax agent who had incorrectly claimed significant travel and other work-related expense (WRE) deductions in several of his clients’ tax returns, and provided related incorrect advice to clients.

ATO audits revealed these expenses were private in nature, did not satisfy relevant taxation laws or ATO rulings, and/or were unsubstantiated. The agent had also failed to properly notify his clients about the ATO audits and their outcomes.

The BCC was particularly concerned the agent maintained his position regarding the validity of these WRE claims in his statements to the Board, and did not take any steps to improve his knowledge on WRE deductions.

The BCC therefore decided to suspend the agent’s registration for four months and imposed an order requiring the agent to:

  • complete and pass a course of education in income tax preparation and lodgement
  • provide evidence of CPE activities completed.

Read about these case studies and others in our summary 

How personal conduct relates to 'fit and proper'

Did you know your personal conduct is considered in determining if you are a fit and proper person suitable for tax practitioner registration?

In deciding whether someone is a fit and proper person, we consider:

  • Are they of good fame, integrity and character?
  • Have they been convicted of a serious taxation offence or an offence involving fraud or dishonesty?
  • Are they an undischarged bankrupt?
  • Have they been sentenced to a term of imprisonment?
  • Do they meet their personal tax obligations?

If a registered tax agent, BAS agent or tax (financial) adviser ceases to meet the fit and proper person requirement, we may decide to terminate their registration.

This situation occurred recently, when the Administrative Appeals Tribunal (AAT) affirmed the decision of the TPB to terminate the registration of a tax practitioner based on his personal conduct.

Mr Ranjit Dadwal had failed to declare earlier convictions as part of his annual declaration to the TPB.

The AAT affirmed the TPB approach that even if a person’s behaviour doesn’t involve professional misconduct, it may still demonstrate they are not a fit and proper person under the Tax Agent Services Act 2009.

Read the media release

Watch our free webinars

Did you know our free webinars can count towards your CPE? You can claim one hour of CPE for each webinar you attend or view on our YouTube channel. We offer a range of topics and you can register online.

Your feedback

We invite your feedback on topics or issues you would like us to address in future editions of TPB eNews.
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About the Tax Practitioners Board
The Tax Practitioners Board (TPB) was established to regulate tax practitioners in order to protect consumers. The TPB assures the community that tax practitioners meet the appropriate standards of professional and ethical conduct.
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