Rights and obligations of clients and prospective clients for the provision of tax services

The provision of tax agent services in Australia is regulated by the Tax Agent Services Act 2009 (“the Act”). The Act covers the registration and service quality of tax agents and provides protection for taxpayers in their dealings with tax agents.

The Act includes a code of professional conduct (“the Code”) for tax practitioners, stipulates certain obligations tax practitioners must abide by in providing tax agent services. One obligation of tax practitioners under the Code is to inform clients of their rights and obligations that are materially related to the tax agent services provided and their decision to engage or continue to engage a registered tax practitioner.

This information is provided in this article to keep you informed and ensure compliance with the requirements under the Code. You can also refer to the Tax Practitioners Board (TPB) Information for tax agent clients factsheet.

1. Accessing the TPB Register

The Tax Practitioners Board (TPB) maintains a comprehensive register of tax agents and BAS agents. This register is a valuable resource for clients to verify the credentials of their tax practitioners. You can access and search the TPB register to ensure that your tax practitioner is registered and in good standing. The register also provides important information about higher-risk cases where serious sanctions have been imposed following an investigation.

Ernst & Young is recorded in the TPB register under Registered Agent Number 15890002.

2. Making Complaints and the TPB Complaints Process

If you have concerns about the services provided by your tax practitioner, you have the right to make a complaint to the TPB. The TPB welcomes all feedback, which helps improve services and the regulatory system. Complaints can be made about both registered and unregistered tax practitioners who are not complying with the law using a simple online form available on the TPB website, along with further information about the complaints process.

3. Your Rights, Responsibilities, and Obligations

3.1 Your Rights

In the context of tax agent services, you have rights, including to:

• Seek an advance opinion from the Australian Taxation Office (“ATO”) by way of a private binding ruling on the taxation consequences of any transaction you propose to enter into
• Make an objection against an assessment and, if unsuccessful, the right to appeal to a Court or Tribunal (in some cases, the ATO may contribute to the costs of litigation under its test case program), and
• Amend your tax returns within the relevant statutory periods

As well, the ATO Taxpayers’ charter sets out your rights to expect the ATO to:

• Treat you fairly and reasonably
• Treat you as being honest in your tax affairs unless you act otherwise
• Offer you professional service and assistance to help you understand and meet your tax obligations
• Accept that you can be represented and get advice about your tax affairs
• Respect your privacy
• Keep the information it holds about you confidential in accordance with the law
• Give you access to information it holds about you in accordance with the law
• Give you advice and information you can rely on
• Explain to you the decisions it makes about your tax affairs
• Respect your right to a review
• Respect your right to make a complaint
• Administer the taxation system in a way that minimises your costs of complying, and
• Be accountable for what it does

3.2 Your Responsibilities

As a client, you are expected to:

• Act honestly and with integrity
• Respond to reasonable requests and timelines
• Provide truthful information and keep required records.
• Comply with tax laws

3.3 Your Obligations

Further, the ATO Taxpayers’ charter sets out the ATO’s expectations of taxpayers including to:

• Be truthful in your dealings with the ATO
• Keep records in accordance with the law
• Take reasonable care in preparing your tax returns and other documents and in keeping records
• Lodge tax returns and other required documents or information by the due date
• Pay your taxes and other amounts by the due date, and
• Be cooperative in your dealings with the ATO

Failure to comply with these obligations creates the risk of additional taxes, penalties and interest. A summary of penalties and a summary of the record keeping requirements can also be accessed on the ATO’s website.

4. Obligations of your tax practitioner

Your tax practitioner is obligated to:

• Act honestly and with integrity.
• Provide competent services.
• Exercise reasonable care.
• Practice lawfully in your best interests.
• Address confidentiality and any conflicts of interest

Your tax practitioner must also keep you informed about certain events or matters, including any conditions on their registration, and if certain prescribed events have occurred involving the tax practitioner within the last five years. They must advise you of this at the time you make enquiries to engage or re-engage them to provide tax services.  Applicable events or matters are noted in the next section.

Your tax practitioner, cannot make, prepare, permit, or direct the making of statements to the Board, Commissioner or other Australian government agencies that are false or misleading. In complying with the Act and under the Code your tax practitioner is required to take reasonable steps to correct false or misleading statements made, which may include under certain circumstances withdrawing from the professional relationship with you and/or notifying the ATO or TPB.

5. Reportable events or matters

Currently, there are no reportable matters or events to disclose. However, should any prescribed events occur, EY teams will update this information and inform you in the manner, form and timeframes required under the Code.

There are no conditions imposed on Ernst & Young’s registration.

6. Safe harbours

Taxpayers have “safe harbours” from administrative penalties for incorrect or late lodgement of tax returns. The safe harbours in the Taxation Administration Act 1953 apply if, among other things, taxpayers provide their tax agents with “all relevant taxation information” in a timely manner. You must therefore provide your tax practitioner with all such information and documentation, both voluntarily and in response to their queries. Any failure by you to do so may affect your ability to access the safe harbour provisions.

7. Self-assessment system and amendment of tax returns

Under the self-assessment system, an assessment is made (or deemed to be made) on the basis of the information and calculations contained in the tax return. Tax returns are not initially examined when lodged with the ATO but may subsequently be reviewed within statutory time periods and subject to amendment (and the possible imposition of penalties) if found to be incorrect.

There are varying statutory time periods for the amendment of tax returns (including any amendments you may wish to initiate). The amendment period for fraud or evasion cases is unlimited.

For goods and services tax returns (lodged through the periodic business activity statements), there is also effectively a four-year review period, after which outstanding tax cannot be recovered by the Commissioner, nor additional input tax credits claimed by the taxpayer.