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Draft TPB(I) D53/2024 – Breach reporting under the Tax Agent Services Act 2009

Published Date: 31 May 2024


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Draft TPB(I) D53/2024 – Breach reporting under the Tax Agent Services Act 2009 

The Australian Bookkeepers Association, Chartered Accountants Australia and New Zealand, CPA Australia, the Institute of Public Accountants, the Institute of Certified Bookkeepers, the NTAA Plus, the Taxation Committee of the Business Law Section of the Law Council of Australia, the SMSF Association, and The Tax Institute (together, the Joint Bodies) write to you as members of the Tax Practitioners Governance and Standards Forum (GSF) and Consultative Forum (CF). The Joint Bodies are the peak professional accounting and tax practitioner bodies in Australia representing the tax profession, the superannuation sector, and financial advisers. We welcome the opportunity to make a submission to the Tax Practitioners Board (TPB) in respect of its consultation on the following draft guidance materials (collectively, the draft guidance) relating to the breach reporting obligations under the Tax Agent Services Act 2009 (Cth) (TASA):

  • draft TPB Information Sheet TPB(I) D53/2024 breach reporting under the Tax Agent Services Act 2009 (the draft Information Sheet);
  • draft summary of breach reporting obligations; and
  • draft high-level flowchart and decision tree on breach reporting.

The draft Information Sheet summarises the new TASA breach reporting requirements in section 30-35 (new paragraphs (ba)) of the TASA and new section 30-40 for registered tax agents and BAS agents, collectively referred to by the TPB as registered tax practitioners (practitioners). The new breach reporting rules apply to breaches that occur on or after 1 July 2024 and were given legislative effect by the Treasury Laws Amendment (2023 Measures No. 1) Act 2023 (Cth) (TLAA1 2023).

The Joint Bodies recognise the intent of introducing new breach reporting requirements which are expected to enhance the quality of tax practitioner services, strengthen client protection, and instil greater trust in the integrity of the tax system. However, the Joint Bodies reiterate our concerns over the lack of proper consultation, particularly in relation to the amendments introduced by the Australian Greens to Part 5 of Schedule 3 to the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023. Those amendments were not subject to the usual process of public consultation and were tabled without an accompanying explanatory memorandum. This has resulted in vaguely expressed law that imposes a significant compliance burden on practitioners and will be challenging to apply and regulate in practice. We also acknowledge that the vaguely expressed law has made the task of the TPB as the regulator to practically implement and administer the law a challenging exercise.

The draft Information Sheet attempts to provide guidance on the vaguely expressed law. However, in our view, it falls short of being practically useful to practitioners in determining their reporting obligations. This is due, in part, to the extensive use of undefined terms in the legislation (which accordingly take their ordinary meaning), and the nature of the reporting requirements that depend on the facts and circumstances of each case.

Our key observations and recommendations to improve the draft guidance as a matter of high priority are summarised as follows:

  • The draft Information Sheet requires further interpretive guidance on the new breach reporting requirements and further relevant case studies to be practically useful for practitioners.
  • The draft Information Sheet should make it clear, to allay any confusion among practitioners, that the intent of the practitioner is irrelevant in determining whether there has been a significant breach of the Code of Professional Conduct in section 30-10 of the TASA (Code).
  • The definition of ‘significant breach of the Code’ involves a complex analysis based on evidence and legal concepts. The term ‘otherwise significant’ lacks a specific definition. Likewise, ‘material loss or damage’ requires an assessment and the exercise of judgment on materiality. The term ‘reasonable grounds to believe’ similarly requires an objective assessment of the facts and circumstances. Practitioners may not have sufficient information or skills to make such assessments. While the draft Information Sheet acknowledges this limitation, it should provide practical guidance on how to address it.
  • The draft Information Sheet and case studies should make it clear who has the reporting obligation. When a company or partnership is registered as well as a sufficient number of registered individuals, it is unclear whether the individual, the entity, or both, should be reporting. Further, the guidance should clarify whether selfreporting or peer-reporting applies in cases where there are multiple individuals and associated entities involved.
  • The draft Information Sheet outlines varying degrees of evidentiary requirements that may result in confusion and practical challenges for practitioners. The draft guidance should provide a clearer and more concise framework for practitioners to follow that consolidates the evidentiary requirements throughout the guidance and better explains how the varying requirements should be met. For example, paragraph 34 provides that a practitioner's basis for their belief must be supported by appropriate facts and evidence and be able to be appropriately substantiated, but it is not clear what ‘appropriately substantiate’ without needing to have conclusive proof, means. Further, paragraph 107 refers to evidence, verification or corroboration so it would be useful to clarify how this interacts with the guidance in paragraph 34.
  • The draft Information Sheet should provide further guidance on the following:
    •  the repercussions of frivolous, vexatious or malicious complaints;
    •  the repercussions of failing to comply with reporting obligations by the due date;
    •  whistleblower protection for unrelated practitioners;
    • consequences and resolution of cases where a practitioner disagrees with the TPB’s position on being required to report a breach; and
    • the action to be taken by a recognised professional association (RPA) upon receiving notification from a practitioner about a significant breach of the Code by another practitioner who is a member of that RPA, beyond their existing oversight, disciplinary and professional conduct processes.

Our further recommended improvements to the draft guidance include:

  • to avoid superfluous claims, establishing an ethics officer or hotline for practitioners
  • to seek guidance on ethical dilemmas and their obligations under the TASA, preferably on an anonymous basis;
  • providing further examples to better explain the concepts of ‘significant breach of the Code’ and ‘otherwise significant’;
  • providing further case studies on specific practical circumstances dealing with the application of the breach reporting requirements insofar as they affect the supervision and control of employees, staff training etc.; and
  • providing clearer guidelines on the consequences and the TPB’s approach in cases where a practitioner disagrees with the TPB’s decision, including any decision review process.

Our detailed response and recommendations to further improve the draft guidance are contained in Appendix A.

The Joint Bodies would be pleased to offer our assistance to the TPB and work collaboratively on developing further case studies to better assist practitioners. We have many practical examples based on our collective experiences that we can share with you.


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Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

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