Drastic changes to the tax code pose a serious threat to the industry’s survival

Tax Community in Turmoil Over Sudden Rule Changes and Tight Deadlines

Tax practitioners across the country are in a state of shock and panic after a sudden set of rule changes mandated by Assistant Treasurer Stephen Jones. The new rules require firms to implement new ethical and governance procedures within a mere few weeks or risk disqualification.

The determination, released last week without warning, has left practitioners scrambling to overhaul their systems before the 1 August deadline. Many in the tax community are calling the provisions “onerous” and “overwhelming.”

Timothy Munro, founder of Brisbane accounting firm Change Accountants, expressed his dismay, stating, “This is the scariest and worst thing that I’ve ever seen happen in my 35 years in the accounting industry. There was basically no warning that this was going to happen and there’s been no guidance released to help smaller accounting firms comply. This could wipe out the industry.”

Despite opposition from professional bodies, the government inserted a provision in the Tax Agent Services Act in November allowing a minister to modify the code without parliamentary scrutiny. Jones’ determination, the first use of this power, requires practitioners to keep client records for five years, implement quality management processes, and disclose personal matters that could influence clients’ decisions.

The new obligations come on top of existing breach reporting rules that came into effect on 1 July, further complicating the situation for practitioners. IPA general manager of technical policy Tony Greco criticized the determination for creating confusion and uncertainty, stating that it is inconsistent with existing obligations.

Tax lawyer Arthur Athanasiou raised concerns about the short time frame given to practitioners to comply with the new rules, stating that it could overwhelm smaller practices and threaten their viability. Many practitioners, like Canberra accountant Gail Freeman, were caught off guard by the changes and are struggling to understand and implement the new requirements.

ChangeGPS CEO David Boyar criticized the way the changes were introduced, stating that it unfairly burdens smaller practitioners who are trying to do the right thing. The lack of communication and guidance from the government has left many in the tax community feeling lost and unsure of how to proceed.

The tax community is now facing a race against time to meet the new requirements and avoid disqualification, with many practitioners feeling frustrated and overwhelmed by the sudden changes.