Liberal MP Sharma has urged all senators to back his party’s motion to block the government’s changes to the tax agent code of conduct, rallying support ahead of the 10 September vote.
The NSW senator said Assistant Treasurer Stephen Jones’ determination had to be disallowed to prevent “far-reaching” impacts on practitioners’ privacy and client relationships.
“I urge my colleagues to study this determination closely, talk to tax practitioners affected by this determination and join us in this disallowance motion to allow proper consultation to be had with those affected by these quite far-reaching changes,” Sharma said in a two-minute statement in the Senate last week.
The Coalition’s push to disallow the changes in a fortnight comes after intense lobbying from professional bodies and practitioners in the weeks since the determination was registered on 2 July.
While Jones deferred the determination’s original 1 August start date, the substance of its eight new obligations remains unchanged.
Sharma said a number of accountants and tax professionals had contacted his office to express their concerns, particularly around sections 45 and 15 of the determination.
Section 45 forces practitioners to disclose “any” matter that could significantly influence clients’ decision to engage them.
Practitioners feared that this would include issues of a deeply personal or private nature to prospective clients, he said.
“This could include, for instance, the practitioner’s health, potentially their marital status, any problems they might be having at home, any substance abuse or addictive elements, as well as things such as an investigation by the Tax Practitioners Board which has not yet led to a conclusion,” he said.
The section would also apply retrospectively, he said, requiring disclosure of matters as far back as 1 July 2022.
Section 15 was also of concern to his constituents due to potential impact on “the relationship of confidentiality and trust that should exist between a tax practitioner or adviser and their client”.
He said it effectively forced practitioners to “dob in” clients to authorities for material, false, misleading, or incorrect statements in a way that would inhibit clients from having a frank conversation.
The disallowance motion, which will be moved by Liberal senator Dean Smith on 10 September, needs a majority vote to pass.
Independent senator David Pocock has hinted at the possibility of voting in favour of the motion, as reported by International Tax Review.
But the position of the Greens, who hold the balance of power in the Senate, remains unclear.
The TPB reform package that included the insertion of section 30-12 of the Tax Agent Services Act(TASA) to give the Assistant Treasurer the power to unilaterally modify the code was welcomed by aenator Barbara Pocock in a media release at the end of last year.
More recently, however, lower house MP Max Chandler-Mather wrote to Jones backing up practitioner’s concerns over the determination, calling on the government to provide clarity on the “vague and contradictory” rules.
PwC Australia is close to settling a defamation action brought by a former partner who was incorrectly and publicly linked to the big four firm’s notorious tax leaks scandal.
Sources not authorised to speak due to the confidential nature of talks said PwC was looking to settle and move on, rather than air more dirty laundry in court. However, they cautioned a deal was not finalised.
The matter is due for its first case management hearing next week. Neither PwC nor Ms Stubbins, who are separately represented, have filed a defence at this stage.
Both parties declined to comment as the matter is still before the courts.
Mr Gregg successfully sued PwC last year for failing to follow proper process in its attempt to dismiss him as one of eight partners who were pushed out as part of the fallout of the tax leaks scandal.
After the NSW Supreme Court ruled the sacking improper, Mr Gregg left the firm of his own accord. When a mediation process, required under PwC’s partnership agreement, failed earlier this year, Mr Gregg launched his defamation action in the Federal Court.
No sum for damages was included in his defamation claim, but if the case pushes forward, it is expected to be in the millions. PwC partners earn, on average, more than $930,000 a year, according to data provided to the Senate last year.
Letters posted on website
Mr Gregg’s defamation claim stems from PwC’s response to the tax leaks scandal. As part of the fallout, the firm named Mr Gregg, a research and development incentive tax specialist, as one of eight partners who had left or were in the process of being removed from the firm’s partnership.
His claim alleges PwC’s public statements implied he was involved in improperly sharing confidential government information, which triggered the PwC tax leaks scandal.
These statements include open letters penned by Ms Stubbins that were posted on PwC’s website and widely published across the media. Ms Stubbins took over as interim chief executive in May last year to deal with the tax leaks crisis. However, PwC International stepped in and installed Kevin Burrowes in October. Ms Stubbins left the firm in January.
PwC noted in answer to questions on notice at a parliamentary inquiry into ethics in the consulting industry that it covers legal fees of former partners.
“As is standard practice in many organisations, where a current or former employee or partner is involved in a regulatory process or other proceedings arising out of their employment or partnership, PwC Australia may cover legal fees for independent legal representation for that individual,” the firm said.
In June, PwC was ordered to pay $250,000, plus interest, for Mr Gregg’s legal costs in the case to stop it from firing him in the NSW Supreme Court. It has also settled, on unknown terms, with another partner, Neil Fuller, who was pushed out after the tax leaks scandal.
