Mandatory ADR for Tax Agents now a reality!

Something must have been brewing in the TPB’s inner sanctum to come up with the most recent ADR scheme. Remembering that the whole point of the Tax Agent Services Act 2009 is consumer protection, at first blush, this proposal might be seen as being a little excessive and over the top. Moreover, it seems to have flown under the radar because it doesn’t seem to have been promoted by the TPB or picked up by the accountancy media just yet.

The proposed mandatory ADR scheme goes something like this sequentially:

1.    The complaint will be sent to the tax practitioner

2.    The tax practitioner must engage with the complainant directly

3.    The tax practitioner must endeavour to resolve the complaint within 72 hours

4.    The tax practitioner must notify the TPB of the outcome

Putting to one side how the TPB might assess an initial complaint as being suitable for referral, because nothing seems to have been published about how any client complaint might be assessed as being suitable, it sets in train a rapid set of mandatory requirements that must be attended to within 3 days!

I suspect this scheme, whilst established with good intentions, is misconceived. In a time of being bombarded by burdensome ATO lodgement requirements and trying to satisfy clients that aren’t making complaints, as well as running a practice and bringing home a salary, a tax agent will now need to engage with an aggrieved client directly. 

The process raises a whole range of practical issues, such as what if the agent can’t even meet the client to discuss the issue within 72 hours, or the client doesn’t want to engage, or the agent simply doesn’t have the time and resources to respond to a complaint that might have a prolonged history? 

Perhaps the scheme might’ve been enhanced by some preparatory steps, such as upon receipt of the client complaint the TPB asks the agent first if the matter can be resolved within 72 days; at least in that case, the agent can also be prepared to deal with the complaint rather than receiving an email or a letter from the TPB out of the blue. Furthermore, the TPB reserves the right to take further action if an agent doesn’t meet the very short deadline, or the matter doesn’t resolve in the way that it should.

In my experience, the types of common complaints are usually fee related, lien/record retention or based on allegations of inferior service or technical levels. I hope that these types of complaints don’t manifest themselves as complaints that are referred by the TPB with an expectation that they can or ought to be resolved to the complainant’s satisfaction within 72 hours; that’s not how it works in the real world! I also hope that a lot of thought is given by the TPB to the types of complaints that are worthy of referral, because otherwise the process will likely become widely abused by clients. 

In any event, the mandatory ADR scheme starts in April, although no firm date is given. Tax agents should be aware of the scheme and think about the steps that need to be put into place in their practices to deal with the unfortunate event of a TPB referral, because the clock's already started ticking.