Accountants are often called upon by their clients to give tax advice. However, you could be advising beyond your expertise, which can put you and your practice at unnecessary risk of disciplinary action.
While there are protections for tax agents providing “tax agent services” in the Tax Agents Services Act 2009 (TASA 2009), you need to ensure that you are not inadvertently engaging in unqualified legal practice by going beyond what are considered “tax agent services”.
The prohibition on engaging in unqualified legal practice is largely driven by a consumer protection principle – that persons providing legal advice to the public should have the necessary expertise.
Tax agents must comply with a code of conduct set out in the TASA 2009, including obligations to ensure that tax agent services are provided competently. Some complex tax matters may require legal skills and knowledge not possessed by a tax agent. In such situations, the advice of a tax lawyer should be sought.
Furthermore, providing advice on state taxes (e.g. stamp duty, land tax, payroll tax) may be outside federal protections for tax agents. If you routinely provide advice on state taxes in your practice, you may be exposed to disciplinary action and/or penalties for engaging in unqualified legal practice.
You should further note that “tax agent services” does not extend to implementing advice (i.e. preparing documents that create or regulate the transaction that is being advised upon – for example drafting trust deeds or preparing share or business sale agreements). Again, the services of a suitably qualified lawyer should be retained.
By taking advantage of the expertise of a qualified lawyer you can obtain advice on tax and structuring, as well as receive assistance with the implementation of that advice.
If you are ever in a situation where your clients request your advice in tax or other legal matters, get in touch with the Morrows Legal team to consider whether we can assist you.