Under section 15 of the Tax Agent Services (Code of Professional Conduct) Determination 2024 (Code Determination), you must not make, prepare, or direct someone else to make or prepare a statement that you know, or ought reasonably to know, is false or misleading in a material particular (including by omission).
This applies to statements you make, prepare, or direct someone else to make or prepare to us, the Australian Taxation Office (ATO) or another Australian government agency, as a registered tax practitioner or in any other capacity.
To be ‘material’, the false or misleading particular must be significant, and not trivial or inconsequential. It must be relevant to the purpose for which it is made, for example, it will be taken into account by a decision maker when making a decision to which the statement or particular relates.
When does this obligation apply
This obligation applies from:
- 1 July 2025 – for tax practitioners with 100 or less employees
- 1 January 2025 – for other tax practitioners.
Reasonable actions
If all of the following apply, you must, within a reasonable time after you believe that a statement was false or misleading in a material particular (including by omission), take further action as set out in the table below:
- A statement has been given to us or the ATO.
- One of the following applies:
- you made the statement, or permitted or directed someone else to make the statement, other than for a client; or
- you made or prepared the statement, or permitted or directed someone else to make or prepare the statement for an entity that was your client at the time the statement was given to us or the ATO.
- At a time after the statement was made you have reasonable grounds to believe that the statement:
- was false or misleading in a material particular at the time it was made, or
- omitted a matter or thing, at the time it was made, that made the statement misleading in a material particular.
You also have reasonable grounds to believe that the false or misleading nature of the statement resulted from:
- a failure to take reasonable care in connection with the preparation or making of the statement; or
- recklessness as to the operation of a taxation law; or
- intentional disregard of a taxation law
by you (or someone permitted or directed by you) or your client.
| Situation | Take reasonable steps to |
|---|---|
| 1. You made the statement or or permitted or directed someone else to make the statement (other than a statement made for a client) | Have the statement corrected. |
| 2. You made or prepared the statement, or permitted or directed someone else to make or prepare the statement, for a client | Advise the client about all of the following: a) that the statement should be corrected; and b) the possible consequences of not taking action to correct the statement. However, this item does not apply to the extent that doing so would be unlawful under another Australian law. |
3. Where: a) you made or prepared the statement, or permitted or directed someone else to make or prepare the statement, for a client; and b) after a reasonable period of time after taking the steps mentioned in item 2 of this table, you are not reasonably satisfied that the client has corrected the statement or otherwise adequately explained the basis for the statement; and c) the false or misleading nature of the statement resulted from recklessness as to the operation of a taxation law or intentional disregard of a taxation law | Withdraw from the engagement, and professional relationship, with the client (including no longer providing any further tax agent services to the client). However, this item does not apply to the extent that:
|
4. Where: a) you made or prepared the statement, or permitted or directed someone else to make or prepare the statement, for a client; and b) after a reasonable period of time after taking the steps mentioned in item 2 of this table, you are not reasonably satisfied that the client has corrected the statement or otherwise adequately explained the basis for the statement; and c) the false or misleading nature of the statement resulted from recklessness as to the operation of a taxation law or intentional disregard of a taxation law d) you have reasonable grounds to believe the client’s actions have caused, are causing, or may still cause, substantial harm to the interests of others (including investors, creditors, employees, or the public). | Notify the Board or Commissioner (as the case requires) that you have advised your client that a statement made to the Board or Commissioner should be corrected and you are not reasonably satisfied that your advice was acted upon. However, this item does not apply to the extent that:
Take any further action as you reasonably consider is needed in the public interest. However, this item does not apply to the extent that:
|
Breach reporting obligation
In some circumstances, the making, preparing or directing, or permitting someone to make or prepare a false or misleading statement may give rise to a significant breach of the Code of Professional Conduct (Code). Where you reasonably believe that it may be so, you must provide a report to us under the breach reporting obligations in the Tax Agent Services Act 2009 (TASA). For further information on the breach reporting requirements, refer to tpb.gov.au/breach-reporting.
Consequences for breaching this obligation
If you fail to comply with this obligation, we may find that you have breached the Code and may impose sanctions for the breach.
Further information
For detailed information about how this obligation applies, including some practical case studies, refer to TPB(I) 45/2024 False or misleading statements.
Helpful resources
Last modified: 23 December 2024