TPB Investigation: Investigation by the Tax Practitioners Board (TPB)?
If you are under a TPB investigation by the Tax Practitioners Board for a possible breach of the Code of Professional Conduct under the Tax Agent Services Act 2009, you should contact King Lawyers immediately for legal advice and representation.
Tax Practitioners Board’s power to conduct a formal TPB investigation
The Tax Practitioners Board’s legal power to carry out a formal investigation is provided under section 60-95 of the Tax Agent Services Act 2009.
Issues that may be investigated by the Tax Practitioners Board
The Tax Practitioners Board may investigate the following matters:
- an application for registration of tax agents, BAS agents or tax (financial) advisers
- breaches of the Code of Professional Conduct
- any false or misleading statements made to the Commissioner of Taxation
- advertising or supplying tax agent services when not registered
- any other conduct that may breach the Tax Agent Services Act 2009
The Code of Professional Conduct for registered tax agents and other tax practitioners in Australia
The Code of Professional Conduct under the Tax Agent Services Act 2009 regulates the personal and professional conduct of all registered tax agents, BAS agents and tax (financial) advisers.
The Code of Professional Conduct sets out principles under five separate categories:
- Honesty and integrity
- Other responsibilities
The Code of Professional Conduct stipulates that:
- You must act honestly and with integrity.
- You must comply with the taxation laws in the conduct of your personal affairs.
- If you receive money or other property from or on behalf of a client and you hold the money or other property on trust, you must account to your client for the money or other property.
- You must act lawfully in the best interests of your client.
- You must have in place adequate arrangements for the management of conflicts of interest that may arise in relation to the activities that you undertake in the capacity of a registered tax agent, BAS agent or tax (financial) adviser.
- Unless you have a legal duty to do so, you must not disclose any information relating to a client’s affairs to a third party without your client’s permission.
- You must ensure that a tax agent service that you provide, or that is provided on your behalf, is provided competently.
- You must maintain knowledge and skills relevant to the tax agent services that you provide.
- You must take reasonable care in ascertaining a client’s state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement you are making or a thing you are doing on behalf of the client.
- You must take reasonable care to ensure that taxation laws are applied correctly to the circumstances in relation to which you are providing advice to a client.
- You must not knowingly obstruct the proper administration of the taxation laws.
- You must advise your client of the client’s rights and obligations under the taxation laws that are materially related to the tax agent services you provide.
- You must maintain professional indemnity insurance that meets the Board’s requirements.
- You must respond to requests and directions from the Board in a timely, responsible and reasonable manner.
Notification of investigation by the Tax Practitioners Board
The Tax Practitioners Board must notify you in writing if the Board decides to investigate you.
The notice of the Board’s investigation must be given to you within 2 weeks after the decision to investigate is made.
An investigation is taken to commence on the date that the Tax Practitioners Board has issued the notice of investigation.
The process and procedures for an investigation by the Tax Practitioners Board
The Tax Practitioners Board has a discretion to decide the process and procedures for its investigation.
Importantly, unlike a court, the Tax Practitioners Board is not bound by the rules of evidence.
During an investigation, the Tax Practitioners Board can compel witnesses to appear before the Board and give evidence. The Board may also require production of documents or other items and assist with an investigation.
The Board’s enquiries and investigation processes are carried out in a fair and reasonable manner. The Board ensures that procedural fairness is afforded, and the relevant parties are given a reasonable opportunity to be heard before a decision is made by the Board.
A complaint usually triggers a TPB investigation
The Tax Practitioners Board may receive a complaint about the conduct of a registered tax agent, BAS agent or tax (financial) adviser from an existing client of the tax practitioner, a former client or the Australian Taxation Office (ATO). The complaint may then lead to a formal investigation by the Board.
Once a complaint has been received, the Board will make enquiries and gather preliminary information to determine how to proceed with the complaint. If those preliminary enquiries indicate that a formal investigation is needed, the Board will issue a written notice to the tax practitioner to inform them that they are under investigation.
Even though most investigations are triggered by a complaint, the Board does not need to receive a complaint or make preliminary enquiries before it starts an investigation.
Timeframe for a TPB investigation
The Tax Practitioners Board must make a decision about the outcome of an investigation within six months after the investigation commences. However, if there are delays for reasons beyond the Board’s control, the investigation period can be extended.
Outcome of a TPB investigation
Once the Tax Practitioners Board’s investigation has been completed, the Board will decide whether or not a breach of the Tax Agent Services Act 2009 has occurred. If so, the Board will then decide whether to take civil or disciplinary action against the registered tax agent, BAS agent or tax (financial) adviser.
For example, some possible outcomes from an investigation by the Board are as follows:
- making a decision that no further action will be taken against the registered tax agent, BAS agent or tax (financial) adviser
- imposing one or more of the available sanctions such as a written caution, an order, suspension or termination of the registration of the registered tax agent, BAS agent or tax (financial) adviser
- applying to the Federal Court of Australia for an order for payment of a penalty, an injunction against the tax practitioner or both
Within 30 days of the completion of the investigation, the Tax Practitioners Board must notify the affected persons of its decision and provide reasons for the decision.
The Board is also required to notify the following people of its decision:
- any complainant who had lodged the complaint against the registered tax agent, BAS agent or tax (financial) adviser
- any recognised professional association that the registered tax practitioner under investigation is a member of
- in some circumstances, the ATO and Commissioner of Taxation
Legal advice from professional tax lawyers for a TPB investigation
This content of this article is offered as general information only and should not be relied on as specific legal advice on a TPB investigation.
To get legal advice from King Lawyers on your specific circumstances, please contact us to arrange an initial consultation with our experienced tax lawyers.