Tax Agent Services Act 2009

The Act applies to anyone who, for a fee or other reward, provides tax agent services, BAS services or tax (financial) advice services. That captures: in-house tax practices providing services to external clients; legal practitioners who prepare returns or statements in the nature of returns for fees, except for narrow trust and deceased estate exceptions in subsections 50-5(3) and (4); accountants and bookkeepers across the small business sector providing BAS services; financial advisers offering tax (financial) advice services in connection with financial product advice; and partnerships and companies providing such services through individual employees, with extension to each partner under section 50-40 unless the partner satisfies a balance-of-probabilities defence. The Tax Practitioners Board, established by Division 60, is the responsible regulator, and the Commissioner of Taxation is the Commonwealth payee for pecuniary penalties (section 50-45).

A registered tax agent or BAS agent must comply with the Code of Professional Conduct (section 30-10). The 17 limbs include: act honestly and with integrity (subsection (1)); comply with taxation laws in the practitioner's personal affairs (subsection (2)); account to clients for money or property received on trust (subsection (3)); act lawfully in the best interests of the client (subsection (4)); have adequate arrangements for management of conflicts of interest (subsection (5)); not disclose client information without permission unless under legal duty (subsection (6)); ensure services are provided competently (subsection (7)); maintain knowledge and skills (subsection (8)); take reasonable care in ascertaining a client's state of affairs (subsection (9)); take reasonable care to apply taxation laws correctly (subsection (10)); not knowingly obstruct the proper administration of taxation laws (subsection (11)); advise clients of materially relevant rights and obligations (subsection (12)); maintain professional indemnity insurance meeting Board requirements (subsection (13)); respond to Board requests in a timely, responsible and reasonable manner (subsection (14)); not employ disqualified entities without Board approval (subsection (15)); not provide services in connection with arrangements with disqualified entities (subsection (16)); and comply with any obligations determined by the Minister under section 30-12 (subsection (17)).

Notification obligations sit alongside the Code. Section 30-35 requires notification of a change in circumstances and reasonable grounds to believe a significant breach has occurred. Section 30-40 requires notification of significant Code breaches. Disqualified entities themselves must give notice on becoming disqualified or, in the transitional case, on commencement of section 45 (sections 45-10, 45-15 and 45-20).

Part 6 Division 60 confers wide powers on the Board: investigations under Subdivision 60-E; power to request production of documents or things (section 60-100); power to require witnesses to appear (section 60-105); power to take evidence on oath or affirmation (section 60-110); power to retain documents or things (section 60-120); a register of practitioners (section 60-135); power to publish information (section 60-140); and a Tax Practitioners Board Special Account (sections 60-145 to 60-155). Self-incrimination protections are addressed in section 60-115.

After investigation the Board may, under section 30-15, give a written caution, an order under section 30-20 (training, supervision, restriction of services, client notification of findings), suspend registration under section 30-25, or terminate registration under section 30-30. Termination may also occur under Division 40 for individuals (section 40-5), partnerships (section 40-10) or companies (section 40-15). The Board may bar an applicant for a period determined under section 40-25.

The Board may seek injunctions to restrain or require conduct (section 70-5). The Federal Court can order a pecuniary penalty within four years of contravention (section 50-35). The Board may delegate functions (section 70-30).

Penalties are civil pecuniary penalties stated in penalty units. Major maxima:

• Section 50-5 (providing tax agent services or BAS services if unregistered): individual 250 penalty units, body corporate 1,250 penalty units.
• Section 50-10 (advertising tax agent services or BAS services if unregistered): individual 50 penalty units, body corporate 250 penalty units.
• Section 50-15 (representing that you are a registered tax agent or BAS agent): individual penalties stated in the section; body corporate penalties scaled.
• Section 50-17 (providing tax (financial) advice services if not registered or qualified): equivalent civil penalty.
• Section 50-18 (advertising tax (financial) advice services if not registered or qualified): equivalent civil penalty.
• Section 50-20 (making false or misleading statements): pecuniary penalty.
• Section 50-25 (employing or using deregistered entities): pecuniary penalty.
• Section 50-30 (signing of declarations etc.): pecuniary penalty.

Section 50-40 extends partnership liability to each partner subject to a defence. Section 50-45 makes pecuniary penalties payable to the Commissioner on behalf of the Commonwealth. Procedure for civil penalty orders is set by Subdivision 50-C and Subdivision 298-B of Schedule 1 to the Taxation Administration Act 1953.

A registration application is made under section 20-20. The Board grants and notifies under sections 20-25 and 20-30. Registration takes effect under section 20-35 and may be renewed under section 20-50. Variation of conditions sits in section 20-40. Certain events may affect continued registration under section 20-45.

Code investigations follow Subdivision 60-E. Sanctions under sections 30-15 to 30-30 attach following investigation. Notice and effect of termination are set in Subdivision 40-B (section 40-20). The Board must publish suspension decisions by notifiable instrument (note to section 30-25(1)).

Civil penalty applications must be filed within four years after contravention (section 50-35(1)).

Administrative review is available (section 70-10). Where a tribunal review of a decision is provided for, it follows the standard Commonwealth administrative review pathway. The Frugtniet decisions in the Federal Court and Full Federal Court illustrate that final orders by review tribunals are reviewable on grounds of jurisdictional error.

The Act is woven through the Commonwealth tax scheme. Civil penalty procedure draws on Subdivision 298-B of Schedule 1 to the Taxation Administration Act 1953. The Customs Act 1901 Part XI carve-out exempts customs brokers from the BAS service unregistered-provider penalty for import or export indirect tax matters (section 50-5(2)(e)). State and Territory laws regulating legal practice intersect at section 50-5(1)(e) and (2)(d), so a legal practitioner who is prohibited under State or Territory law from providing a tax agent service is captured by the federal civil penalty if also unregistered. The Acts Interpretation Act 1901 provides standard interpretive defaults; section 80-5 covers how Guides interpret this Act. The Privacy Act 1988 interacts with sections 70-35 to 70-45 governing official information and exceptions to disclosure. Section 70-50 preserves legal professional privilege. The Code reaches across into Australian Securities and Investments Commission rules where the practitioner provides tax (financial) advice services.

The Code of Professional Conduct binds the practitioner's personal tax compliance, not just client work (section 30-10(2)). Failure to comply with the practitioner's own taxation obligations is itself a Code breach attracting administrative sanctions. Section 50-5(1)(e)(ii) catches lawyers who prepare returns or statements in the nature of returns for fees, unless the trust or deceased estate carve-out in subsection (3) applies. The civil penalty is a four-year window: late prosecutions are out of time (section 50-35(1)). Holding out as a registered tax agent or BAS agent when unregistered is itself an offence under section 50-15 even where no service is actually provided. Suspension under section 30-25 means the practitioner is taken not to be registered for most purposes, including for the section 50-5 unregistered provider penalty (note to subsection (2)). The disqualified entities regime in section 30-10(15) and (16) creates a strict due-diligence obligation: a registered agent must not employ, use the services of, or arrange with an entity the agent knows or ought reasonably to know is a disqualified entity. Partnerships are caught by section 50-40 with each partner deemed liable unless the partner proves the no-engagement, no-knowledge defence on the balance of probabilities.

A solo accountant lodging tax returns for clients without registration is exposed under section 50-5 to a penalty up to 250 penalty units per contravention. The Federal Court has imposed pecuniary penalties for repeated unregistered conduct: in Tax Practitioners Board v Dedic [2014] FCA 511, the respondent was found to have contravened section 50-5(1) on 86 separate occasions; in Tax Practitioners Board v Shanahan [2013] FCA 764, the respondent contravened subsection 50-5(1) on 47 separate occasions; in Tax Practitioners Board v Su [2014] FCA 731, the Court ordered $70,000 in pecuniary penalties for 50 contraventions of false or misleading statements under section 50-20.

A bookkeeper who provides BAS services without registration but holds a customs broker licence under Part XI of the Customs Act 1901 falls outside section 50-5(2) for those import or export matters, but remains exposed for general BAS work.

A partnership of registered tax agents whose conduct contravenes section 50-20 (making false or misleading statements about a return) exposes each partner to civil penalty under section 50-40 unless the partner proves no engagement, no aiding or abetting, and no knowledge.

A Code breach (such as failing to maintain professional indemnity insurance under section 30-10(13)) does not directly trigger a Federal Court civil penalty, but does expose the agent to written caution, order, suspension or termination under section 30-15. Suspension carries the indirect consequence under section 30-25(4) that the agent is treated as unregistered, which can convert further conduct into a section 50-5 contravention.

A disqualified entity arrangement, even if structured through a related company, is captured by section 30-10(16). A registered agent who knows or ought reasonably to know the counterparty is disqualified breaches the Code and exposes itself to administrative sanction.

Administrative review is preserved by section 70-10 and the underlying tribunal architecture. The Full Federal Court in Frugtniet v Tax Practitioners Board [2019] FCAFC 193 confirmed that the Tax Practitioners Board is "established by the Tax Agent Services Act 2009 (Cth)" and that the registration regime in Division 20 of Part 2 prescribes the eligibility criteria. The Full Federal Court in Beckett v Tax Practitioners Board [2023] FCAFC 100 endorsed the proposition that an individual applicant must be "a person whom the Tax Practitioners Board (Board) is satisfied is" fit and proper, drawing the construction directly from the Act. Section 70-20 deals with continuity of partnerships across changes in composition. Section 70-15 governs how the Act applies to a person in the capacity of a trustee.