Auditor-General endorses ATO’s COVID-19 response
The ATO’s rapid implementation of COVID-19 economic response measures has been given a tick of approval from the Auditor-General.
Tabled on Monday, the Australian National Audit Office’s (ANAO) performance audit report concluded that the ATO had effectively managed risks, undertook appropriate planning and implemented the six economic response measures it was tasked with in a timely manner.
The six measures include the JobKeeper scheme, the cash flow boost, the early release of superannuation, the enhanced instant asset write-off, the backing business investment, and the temporary reduction of superannuation minimum drawdown rates.
Fear and loathing, and tax accountants
Disciplining tax accountants is a little like the charity collector urging Groucho Marx to give till it hurts.
Neil ChenowethSenior writerWhere does one start? There are the multiple disciplinary measures that James recommends for tax advisers who misbehave, from infringement notices to permanent disbarment. Let’s face it – any sort of disciplinary action beyond the rare temporary deregistration will be a shock to the profession.
Disciplining tax accountants is a little like the charity collector urging Groucho Marx to give till it hurts. “Madam,” he responded grandly, “the very idea hurts”.
At present, the TPB, headed by chairman Ian Klug and CEO Michael O’Neill, can’t even begin formally gathering information before notifying a practitioner that an investigation has begun, and once begun, it can last only six months.
James wants that to go, along with the time-honoured method for tax accountants to dodge an investigation by cancelling their registration.
There should also be administrative penalties, and the TPB should be allowed “to publish more detailed reasons for tax practitioner sanctions”, James recommends. Transparency really isn’t the hallmark of the profession. What was he thinking?
Then there’s legal professional privilege. This doesn’t affect most tax advisers, but the big four firms are involved in a titanic struggle with the Tax Office, over the core belief that any document prepared for the dominant purpose of obtaining legal advice – or in some cases an email simply cc-ed to one of the firm’s lawyers – is sacrosanct and the ATO cannot obtain it.
Two cases are in court over this – one involving 13,000 documents, the other 19,000 documents, all of them said to be integral to obtaining legal advice. Or perhaps not.
James recommends developing for tax practitioners something similar to the protocol the Law Council of Australia is developing with the ATO to handle legal professional privilege.
But regardless of that, he also recommends law changes to insert a provision for legal professional privilege in the Taxation Administration Act that’s similar to section 70 of the ASIC Act.
Section 70 allows ASIC to certify that a person has failed to comply with a disclosure order and apply for a court order.
Closer to home the ATO’s LPP case against PwC and its clients, three JBS Australia meat companies, is due back in court on Friday.
PwC is represented by Ashurst, but the three JBS companies are being represented by PwC Legal, which is claiming legal privilege over documents the ATO has asked for. Justice Moshinsky noted this with some astonishment at the first court appearance.
Why wouldn’t JBS seek its own legal advice? What would PwC Legal do if its own interests diverged from its clients?
One possible and entirely unsubstantiated explanation doing the rounds is that JBS considers that PwC provided an indemnity — or that it was entitled to an indemnity — when PwC marketed a tax scheme to JBS. If that’s the case, it’s immaterial who represents JBS, or even who wins the case.
For PwC, not so much. And now James wants the law on LPP changed.