Tax Adviser Misconduct

Tax Adviser Misconduct

Due to the new ATO tax promoter laws sparked by PWC, you may find your accountant may start charging you higher tax compliance fees for their services or they may start to withdraw providing you with any legitimate and ethical tax advice that could save you money. To find out why read on.

This is my respectful message to all my colleagues in the tax, accounting, medical or healthcare professions. It is a clear message that you should send/tag to your respective professional bodies.

Integrity defines success, not fancy post-nominals or gilded-lettered heads or big conflicted sponsorship deals or Board positions.

My greatest fear has nearly been realised, if your professional bodies do not actively self-regulate you will be regulated.?This starts with not being "naively" conflicted and remaining open and transparent to members.

As an accountant and tax agent collective, it appears as a profession due to the PWC we have embarrassingly failed at scale.?It is everyone ones problem.

Professional Self-regulation is a privilege, not a right, that some are allowed to abuse

Self-regulation is a personal and collective choice based on public interest and client trust. The PWC conflict of interest case referred to by the latest ATO proposed tax promoter rules may accidentally put any tax adviser who provides legitimate tax advice into dangerous territory.

In the end, it may be hard to find an accountant who is prepared to provide you with legitimate and cost-effective tax advice that can save you money.

Everybody will be directly or indirectly hurt by this oversight

Some people do not like paying for accountants and lawyers.

The fact that today I need four independent specialist tax, commercial, health and litigation lawyers to complete a tax return, is making the cost of doing business slightly challenging.?

This will continue to increase the fees a professional must charge their clients and their professional indemnity insurance premiums continue to soar.?

A fair tax system means there is less need to pay more taxes.

Send this strong warning to your professional body, if you are in the accounting, legal, medical, or healthcare professions.?

Understand that they have promised the government/public and their fee-paying members that self-regulation works.

If professional bodies did their jobs, we would not need more expensive rules and red tape or government oversight. This would increase access to care and to a fairer and just society.

Proposed New Laws

If you want to know why, just read the government's proposed new ATO laws: Tax Promoter Penalties

“The proposed reforms focus on three priority areas:

• Strengthening the integrity of the tax system
• Increasing the powers of the regulators
• Strengthening regulatory arrangements to ensure they are fit for purpose.
• Increasing the power of our regulators

Our regulators need the right tools to identify and discipline those who break the law.

We will:

Remove limitations in the tax secrecy laws that were a barrier to regulators acting in response to PwC’s breach of confidence;

Enable the ATO and Tax Practitioners Board to refer ethical misconduct by advisers (including but not limited to confidentiality breaches) to professional associations for disciplinary action;

Protect whistleblowers when they provide the Tax Practitioners Board with evidence of tax agent misconduct;

Give the Tax Practitioners Board more time—up to 24 months—to complete complex investigations;

Improve the Tax Practitioners Board’s public register of practitioners, so that people have more transparency over agent and firm misconduct.”

Where do we go from here?

The time bomb is ticking. It is 5 minutes to midnight before irreversible change sets upon us all.

It is time for all members to hold their professional bodies accountable to a higher standard.

Ensure they start acting in the public interest and not just their own interest.

1. Ensure the words ethics and public interest are clearly embedded in your professional body constitutions;
2. Ensure it applies to all Board and Committee members and not just your grassroots members; and
3. Ensure compliance with fully open and transparent disclosures of interest at every meeting.

Members should demand this standard and challenge their well-intended lawyer or professional body that says "it is not legal", ''over complex" or “necessary”.

If you do not believe me check this 2019 CPA AGM short video out.

How you make your money matters.

?“Integrity defines your success.”

David Dahm

Channa Wijesinghe FCPA, FCA

https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/government-taking-decisive-action-response-pwc-tax-leaks?