TPB refines focus on high-risk tax practitioners

Speaking in a Reuters webinar, CEO of the Tax Practitioners Board (TPB) Michael O’Neill said the regulator is clamping down on high-risk tax practitioners as it moves to better regulate the profession on the back of the findings of the Royal Commission into Misconduct in Banking and Financial Services. 

He explained that the TPB is currently engaged in differentiating between agents who are trying to do the right thing, but occasionally stumble, and those high-risk practitioners that are knowingly reckless.

“It is a very small proportion of the population, but it is a proportion that has a lot of leverage,” Mr O’Neill said.

Last year, the TPB terminated 75 practitioners, compared to 24 a year earlier. However, with the TPB’s stricter compliance approach, terminations have hit 79 this year.

“We’re increasingly focused on taking sanction action, but being particularly targeted in that,” Mr O’Neill said.

“We’re trying to help that person who tripped over the registration requirements, we’re trying to free practitioners from burdens and processes… And also, be much more rigorous in our investigation program.”

The TPB’s current focus has four key aspects, the CEO said. These include relying on data, rationalising their treatments, looking at unregistered practitioners and increasing their collaboration with the ATO, ASIC and other regulatory bodies.

Last week, the TPB said it has identified 2,000 tax practitioners responsible for over $1 billion in overclaimed tax deductions.

Mr O’Neill said these “highest risk” practitioners and unregistered agents are linked to around 4,600 controlled entities and 2.9 million associate clients.

“We’re looking at the indicators of risk of those clients and seeing what are the causes of, say, overclaiming work-related expenses.

“And where we see causation, back to tax agents, they’re the ones we’re going to be targeting.”

The TPB now anticipates possible change to its role as a regulator following the independent review, with the report due to be handed to the government on 31 October.

Proposed changes supporting an increase to the range of sanctions to combat higher-risk practitioners include infringement notices, enforceable undertakings, interim and immediate suspensions, and lifetime bans.