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Lawyers providing tax advice should be registered, say accountants
Accountants are concerned about a “lack of a level playing field” with lawyers who provide tax agent services, and they agree with the federal government that legal practitioners should register to do so.
Jerome Doraisamy
Last month, the Albanese government released a consultation paper reviewing the Tax Practitioners Board (TPB) registration requirements for tax practitioners, focusing on the education, qualification and experience requirements for new entrants and existing practitioners.
The paper considers, among other things, whether the Tax Agent Services Act 2009 (TASA) should be amended to require legal practitioners who provide tax agent services for a fee or reward to be registered with the TPB.
“Legal practitioners who provide legal services, which includes tax advice, are regulated in their respective state and territory and are generally exempt from registration with the TPB. It is only where that legal service includes preparing, or lodging, a return (or a statement in the nature of a return, such as an income tax return or a business activity statement) that the legal practitioner is required to register with the TPB,” the paper said.
“The 2019 TPB Review considered it was appropriate that the general exemption from TPB registration remain, noting the regulatory overlaps that would otherwise exist. Treasury seeks views on the appropriateness of this exemption continuing and whether legal practitioners should be required to register with the TPB to provide tax agent services for a fee, even if it does not include the preparation or lodgement or a return or a statement in the nature of a return.”
In its response to the consultation paper, CPA Australia – a professional accounting body with over 20,000 members Down Under – said it welcomes the proposal to bring legal practitioners who provide tax agent services into the tax practitioner regime.
“The differences in the regulatory environment for lawyers providing tax-related advice is not lost on our members. There are concerns about the lack of a level playing field,” the body said.
“An assessment of the regulation of the legal protection and the protections afforded to consumers who receive bad or incorrect legal advice (as it relates to tax) should be undertaken. The regulatory regime should ensure that there is consistent oversight of all participants in the tax profession.”
CPA Australia is not aware, the body continued, of a tax issue that has gone to the legal profession boards in their respective states or territories, nor is it aware of instances where the Australian Taxation Office has shared information with legal profession boards.
“Members have put to us that lawyers may be just as, if not more, likely to be giving complex or possibly aggressive tax advice,” it said.
“While the policy presumption is that lawyers are already regulated and shouldn’t be over-regulated, we question how effective this is in practice.”
“We also hold concerns that if a registered tax agent and a lawyer work on the same matter which may give rise to a contravention of the TASA, there may be asymmetry between the respective penalties imposed on the lawyer and the agent.”
Jerome Doraisamy
Jerome Doraisamy is the editor of Lawyers Weekly. A former lawyer, he has worked at Momentum Media as a journalist on Lawyers Weekly since February 2018, and has served as editor since March 2022. He is also the host of all five shows under The Lawyers Weekly Podcast Network, and has overseen the brand's audio medium growth from 4,000 downloads per month to over 60,000 downloads per month, making The Lawyers Weekly Show the most popular industry-specific podcast in Australia. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of Minds Count.
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