Granting professional privilege for tax advice delivered by accountants would bring the law in line with current practises, and deliver greater certainty for the profession and clients, accountants say.
Paul Drum, CPA Australia head of business and investment policy, has welcomed the Federal Government’s release of a discussion paper on the idea of protecting communications between accountants and their clients.
He says the professional body has supported the idea of extending professional privilege to accountants, similar to protections afforded to lawyers, for over a decade.
According to Drum, tax advisers are sanctioned by the law to give advice, but don’t have the protections of the law.
“If you can have open and frank discussions with your adviser, you’re going to get the best possible outcome within the law,” Drum says.
“Those who give advice have to protect their client.
“A tax adviser doesn’t have the same privilege as a lawyer does in the context of the discussions.”
Drum believes changing the law would bring it “in line with the way tax advice has evolved in Australia.”
Critics point out that accountants can already object to the Australian Taxation Office accessing their working papers on confidentiality grounds.
But Drum says that this so-called ‘accountants’ concession’ does not deliver certainty for the profession oor their clients.
A spokesperson for Assistant Treasurer Bill Shorten says accountants have voiced support for the idea since the Law Reform Commission recommended the change in a 2007 report.
Submissions for the discussions paper, released on Friday, are due by July 15.
Tax Counsel for the Institute of Chartered Accountants, Yasser El-Ansary has also welcomed the paper.
“This is an issue that we at the Institute have been advocating for some time, and it was great to see Minister Shorten acknowledging the role that professional accountants play in the community,” El-Ansary said in a blog.
Senior tax counsel with the Tax Institute, Robert Jeremenko, says the institute is happy to have this discussion.
“Tax advisers play a really key role in ensuring compliance with tax laws, so we need to ensure that communications between a client and their tax adviser is full and frank,” Jeremenko says.
“And that will only happen when there’s no fear that those communications will need to be handed off to the tax commission.”
He rejects the idea that extending professional privilege to accountants would hurt the unique rights of officers of the court.
“The two privileges can live together in harmony,” Jeremenko says.
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