Submission on Discussion Paper regarding subsection 30-10(9) of the Tax Agent Services Act 2009

On 22 December 2011, the Institute lodged a submission with the Tax Practitioners Board (Board) on the Discussion Paper regarding subsection 30-10(9) of the Tax Agent Services Act 2009 – taking reasonable care in ascertaining a client’s state of affairs (the paper).

Our comments in the submission are intended to be high-level statements of principle in order to clarify some fundamental ‘ground rules’ with the Board so as to assist agents in understanding their broad obligations under Code Item 9.

One of the key issues raised by the paper is the role of ‘scoping’ an engagement and ‘reasonable care.’ Our submission makes the following points:

• In ‘scoping out’ issues, a practitioner is not transferring obligations to the client, but rather is managing their various obligations to take reasonable care in the provision of their services, while also operating within the constraints of their contractual bargain to undertake certain work for an agreed fee
• It would be of concern to the Institute if the Board’s statement in TPB(I) 01/2011 were intended to suggest that despite having scoped out particular tasks or issues, a tax practitioner may nevertheless be regarded by the Board as having failed to take reasonable care in respect of those issues in the ordinary course of events. To the contrary, the tax practitioner should in the ordinary course be regarded as taking reasonable care by undertaking the scoping process 
• In our view, provided that appropriate professional judgment is exercised in scoping the engagement that the practitioner is accepting (initially and on an ongoing basis), a tax practitioner should not be regarded as failing to take reasonable care by appropriately excluding identified tasks or issues from the scope of the engagement.
  

Article last Updated 13 January 2012