Tax advice privilege for accountants a possibility
Accountants could receive legal professional privilege similar to that of lawyers under a new initiative by the Federal Government.
Assistant Treasurer Bill Shorten (pictured) has released a discussion paper that investigates the pros and cons of giving clients of professional tax advisers privilege for tax advice documents prepared for them, which currently have to be disclosed to the Australian Taxation Office (ATO).
The system would be similar to the privilege currently in place for legal professionals, which shields clients from disclosure of documents created for the purpose of obtaining legal advice or in preparation for litigation.
“Thousands of taxpayers use the services of accountants when preparing their tax returns, so it makes sense for the Government to consider it," Shorten said.
While there is no privilege that applies specifically to advice on tax law provided by accountants, the ATO does provide an administrative concession that, in practice, gives some protection for clients.
However a report by the Australian Law Reform Commission into the operation of legal professional privilege recommended establishing tax advice privilege to protect against the coercive information gathering power of the Tax Commissioner.
“This discussion paper considers the recommendation in greater detail by exploring the implications for stakeholders if a privilege is established, and seeks stakeholder and community feedback,” Mr Shorten said.
The closing date for submissions is 15 July, 2011.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
