15. The obligation under section 20 of the Determination applies to activities undertaken by a registered tax practitioner for an Australian government agency in the registered tax practitioner’s professional capacity, whether paid or otherwise.
16. ‘Australian government agency’ is defined in section 995-1 of the Income Tax Assessment Act 1997 as the Commonwealth, a State or a Territory, or an authority of the Commonwealth, or of a State or a Territory. Examples include the Department of the Treasury, Tax Practitioners Board, Australian Taxation Office, Australian Securities and Investments Commission, Australian Competition and Consumer Commission, Department of Education and Training Victoria, and NSW Health.

22. For the purposes of section 20 of the Determination, a conflict of interest is where a registered tax practitioner has a personal interest associated with the activities they undertake for a government agency in their professional capacity or has a duty to another person which is in conflict with the duty owed to the Australian government agency.
23. A conflict of interest may be direct or indirect, and real or apparent (or perceived). Also, it can arise before the registered tax practitioner accepts an engagement or at any time during the engagement. 
24. A real conflict of interest arises where a registered tax practitioner has multiple competing interests and cannot objectively and impartially act in one of the interests. 
25. An apparent conflict of interest arises where a registered tax practitioner has multiple interests, and the nature of those interests are such that they give rise to a reasonable perception by the public that one interest could possibly impact the motivation to act impartially for another interest. Put another way, an apparent conflict of interest arises if a fair-minded lay observer might reasonably conclude that the registered tax practitioner might not bring an impartial mind to the activities they are engaged to undertake for the Australian government agency.^[15]

When is a conflict of interest ‘material’?

30. A material conflict of interest may arise in circumstances that include, but are not limited to, where a registered tax practitioner:
    • is engaged by a government agency to consult on proposed government law reform that impacts clients of the registered tax practitioner such that it may result in a potential or perceived benefit or gain to the registered tax practitioner and / or their clients
    • may benefit or gain financially from their engagement with the government agency directly or indirectly (this could include a benefit to the registered tax practitioner themself, their employer, client and / or other associate)
    • misuses confidential information obtained in dealings with government in circumstances where this conduct may result in a potential or perceived benefit or gain to the registered tax practitioner
    • interferes in government decision making in circumstances where this conduct may result in a potential or perceived benefit or gain to the registered tax practitioner.

60. Once a conflict of interest is disclosed to the Australian government agency, the continued engagement of the registered tax practitioner will be at the discretion of the relevant agency.
61. An assessment of whether to continue with the engagement may consider factors such as:
    • the nature and extent of the conflict of interest
    • steps taken by the registered tax practitioner to manage the conflict of interest
    • any mitigating actions taken by the registered tax practitioner
    • the sensitive nature of the activities undertaken for the Australian government agency 
    • the damage, financial or otherwise, that may result should the engagement continue
    • whether there are opportunities to obtain information and / or services relevant to the activities undertaken by the Australian government agency from an entity that does not have a conflict
    • the extent to which the risks arising from the conflict can be appropriately managed
    • whether the risk of accepting the conflict outweighs the risk of not obtaining the necessary information and / or services relevant to the activities undertaken by the Australian government agency.
62. The discretion recognises that there may be circumstances where the only way the government agency can obtain relevant and necessary expertise is from a registered tax practitioner that has a conflict of interest. 
63. In these circumstances, the government agency may provide express consent to accept a conflict of interest. Where express consent is provided, the conflict of interest must be managed in a way that is consistent with that express consent. It must also be managed in a way that is consistent with the obligation in section 25 of the Determination (discussed in more details at paragraphs 64 to 120).

What is the obligation under section 25?

64. Section 25 of the Determination gives rise to 2 obligations in relation to maintaining confidentiality in dealings with Australian government agencies:
    1. subject to some exceptions (see paragraphs 86 to 105), to not disclose any information received, directly or indirectly, from an Australian government agency in connection with any activities undertaken with that agency in a registered tax practitioner’s professional capacity, and
    2. subject to some exceptions (see paragraphs 116 to 120), to not use any information received, directly or indirectly, from an Australian government agency in connection with any activities undertaken with that agency in a registered tax practitioner’s professional capacity, for their personal advantage, or for the advantage of an associate, employee, employer or client of the registered tax practitioner. 
65. The obligation is intended to protect against the unauthorised disclosure and improper use by registered tax practitioners of information they obtain in relation to activities they undertake with an Australian government agency. 
66. The obligation applies to information received by a tax practitioner directly from the Australian government agency, or indirectly, such as through staff working with the agency on behalf of the registered tax practitioner.^[31]

Activities undertaken with an Australian government agency in your professional capacity

67. Like the obligation under section 20 of the Determination, the obligations under section 25 apply to activities undertaken by a registered tax practitioner with an Australian government agency in the registered tax practitioner’s professional capacity, whether paid or otherwise. 
68. The nature of the activities undertaken by the registered tax practitioner is broader than those to which the obligation in section 20 of the Determination applies and includes activities undertaken for clients other than the Australian government agency. For example, it could include interactions with an Australian government agency in relation to a client of the registered tax practitioner. 
69. For more information in relation to activities undertaken with an Australian government agency in a registered tax practitioner’s professional capacity, see paragraphs 15 to 21 above. 

Obligation to not disclose information

70. Subsection 25(1) of the Determination prohibits registered tax practitioners from disclosing information they receive (directly or indirectly) from an Australian government agency in connection with activities they undertake with the government agency in their professional capacity, unless there is a legal duty to do so or to the extent that the following apply:
    1. it is reasonable to conclude that the information received from the Australian government agency was authorised by that agency for further disclosure, and
    2. any further disclosure of the information was done consistently with the agency’s authorisation (whether express or implied, and as reasonably concluded).
71. For example, where a registered tax practitioner receives information from an Australian government agency, when engaging with that agency for and on behalf of a client, it would be reasonable to conclude that the information received from the agency was authorised for disclosure to the client.
72. Further, these requirements may limit authorised disclosure of government information to certain registered tax practitioners or individuals within an entity, rather than the entity as a whole.^[32]
73. The obligation is not intended to apply to information released by the government agency to the general public (either published on a publicly available government website or through the media), nor does it extend to activities or interactions of a personal nature. ^[33] Further, it is not intended to apply to generic, non-taxpayer specific information provided to the tax practitioner community by the ATO, as this information is general in nature.
74. The key concepts of this obligation are explained further below.

What is ‘information’?

What is a third party?

77. The obligation under section 25 will apply to any disclosure to a ‘third party’.
78. A third party means any entity other than the registered tax practitioner and the government agency.
79. In relation to a registered tax practitioner that outsources a component of the tax agent services to another entity (for example, another registered tax practitioner, a legal practitioner, a contractor, or an overseas or offshore entity), the third party would include that other entity. 
80. Further, a third party may also include entities that maintain offsite data storage systems (including unencrypted ‘cloud storage’). 
81. In the case of a tax agent with a tax (financial) advice services condition that is an authorised representative of an Australian financial services (AFS) licensee, a third party includes the AFS licensee, and vice versa. 
82. Subject to the relevant contractual arrangements, a third party may also include other AFS licensees, authorised representatives, para-planners, product providers and advisers, insurance brokers, and technical teams and advisers. 

In what circumstances can a registered tax practitioner disclose information to a third party?

83. A registered tax practitioner may only disclose information received in connection with activities undertaken with an Australian government agency if:
    1. it is reasonable to conclude that the further disclosure of the information received from the Australian government agency was authorised by that agency and the further disclosure was done consistently with the agency’s authorisation (whether express or implied, and as reasonably concluded), or
    2. there is a legal duty to do so.
84. This ensures that government agencies can establish limits on with whom and how the information may be shared. 
85. Subsection 25(1) of the Determination complements section 20 in circumstances where the disclosure is authorised to certain registered tax practitioners with a need to know the information, and not authorised to be disclosed to people who may have a material conflict of interest. For example, these requirements may limit authorised disclosure of government information to certain registered tax practitioners or individuals within an entity, rather than the entirety of an entity.^[34] 

Reasonable to conclude further disclosure of information was authorised by Australian government agency
 

89. It would be reasonable for a registered tax practitioner to conclude that further disclosure is authorised in each of the following circumstances:
    • where there are no communications from the Australian government agency indicating the information has been supplied in confidence 
    • where there are no communications from the Australia government agency indicating the reproduction or disclosure is somehow qualified 
    • the information is not protected under law from disclosure
    • it is not generally accepted that information of this type or nature would be held in confidence. 
90. For example, where a registered tax practitioner is engaging with an Australian government agency for, and on behalf of, a particular client and receives information from the agency in relation to that client, it would be reasonable to conclude that the information received from the agency was authorised for disclosure to the client. Any further disclosure, such as disclosure to a legal practitioner or other expert engaged in relation to the activities relating to the client, will be a matter determined by the terms of the agreement between the registered tax practitioner and the client.
91. Other relevant factors in determining whether it is reasonable to conclude that further disclosure of the information was authorised by the Australian government agency may include the following:
    • the context in which the information was provided
    • comments made by the government agency when providing the information to the registered tax practitioner
    • the availability of the information provided to the registered tax practitioner from other sources.^[35]
92. If information is sensitive or disclosure raises appreciable risks of potential misuse for personal advantage, there would be a presumption that further disclosure would not be reasonably authorised. Such a presumption would only be rebutted where the recipient of the information held clear evidence that disclosure was authorised. If information is not sensitive and is widely available, it would be much easier to be satisfied that it would be reasonable to conclude that further disclosure was authorised unless the agency expressly provided otherwise.^[36] 
93. Ultimately, the registered tax practitioner should use their professional judgement to assess whether the further disclosure of the information by the registered tax practitioner was authorised, having regard to the Australian government agency’s action and surrounding circumstances. Where there is doubt as to whether the further disclosure was authorised, registered tax practitioners should err on the side of caution and consult the government agency by seeking consent to further disclose.^[37]
94. There is no requirement that the information be marked as confidential or identified as for limited distribution although this may be a relevant factor to reasonably conclude that further disclosure of the information is authorised by the government agency. 
95. Where a registered tax practitioner intends to disclose, to a third party, information received from an Australian government agency in connection with any activities undertaken with the agency, the TPB recommends that the registered tax practitioner should consider, prior to any disclosure, clearly informing the agency that there will be such a disclosure and obtain the agency’s permission. This permission may be by way of a signed letter outlining the information that is to be disclosed and to whom the information is to be disclosed to, signed consent or other communication with the government agency. In all cases, the relevant communication should outline the disclosures to be made, as well as information about the entity / entities that will have access to the information disclosed.
96. While there is no set formula or methodology used to obtain the Australian government agency’s permission, the TPB suggests that registered tax practitioners be clear in explaining to the government agency where information may be disclosed (including, among other things, where a component of the activity or add-on activity will be completed). For example, to avoid any likelihood of a registered tax practitioner’s practices being seen as misleading, the TPB suggests that registered tax practitioners do not imply or state that all activities undertaken with the government agency will be completed in Australia, if that is not the case.
97. In relation to outsourcing arrangements and cloud storage arrangements, the TASA does not specifically prohibit these activities. However, registered tax practitioners must consider their obligations under section 25 of the Determination in relation to these arrangements to ensure confidentiality of information received from an Australian government agency in connection with any activities undertaken with the government agency, including appropriate disclosure in regard to where data is being sent and stored.^[38]
98. While not binding on all registered tax practitioners, further useful guidance on what steps a registered tax practitioner may take when providing or utilising outsourced services may be found in specific APESB guidance.^[39] It is also noted that TPB accredited recognised professional associations may be able to assist in providing practical guidance, while recognising that there is not a default one-size-fits-all template and that arrangements will need to be mindful of the particular circumstances.^[40] 

Further disclosure of information was authorised by Australian government agency but further on-disclosure by the third parties was not authorised

99. Where an Australian government agency authorises (whether express or implied) the disclosure of, to a third party, confidential information received from the government agency in connection with any activities undertaken by the registered tax practitioner with the agency, any further on-disclosure by those third parties would require the authorisation of the government agency.
100. Where further on-disclosure of confidential information by third parties occurs, providing the registered tax practitioner is not aware of the further on-disclosure and the initial further disclosure to the third parties was authorised by the government agency, it is highly unlikely that the registered tax practitioner would be found to be in breach of section 25 of the Determination. However, the registered tax practitioner may be required to report the on-disclosure in accordance with their breach reporting obligations where the third parties are registered tax practitioners.^[41]
101. In addition, the TPB may take regulatory action against third parties who are registered tax practitioners, or alternatively, against the firm in relation to unregistered third parties.

116. A registered tax practitioner may only use information received in connection with activities undertaken for an Australian government agency for the registered tax practitioner’s personal advantage, or the advantage of an associate, employee, employer (which may include the recognised professional association of the registered tax practitioner), or client, if:
     1. it is reasonable to conclude that the use of the information received from the government agency was authorised by that agency to be used in a way that may provide such a personal advantage, and
     2. any further use of the information was done consistently with the agency’s authorisation.
117. A registered tax practitioner must satisfy both parts of paragraph 116 above to be able to use the information for their personal advantage, or the advantage of an associate, employee, employer, or client.
118. Applying this standard, if a reasonable person, possessing the required knowledge, skill and experience of a registered tax practitioner, objectively determined, would conclude that the use of the information for such a purpose was authorised by the Australian government agency, this will be sufficient. It is not necessary to determine the question with any certainty, although it is recommended that registered tax practitioners seek consent if in any doubt.
119. Ultimately, the registered tax practitioner should use their professional judgment to assess whether the use of the information for their personal advantage, or the advantage of others, was authorised, having regard to the circumstances. 
120. In determining whether it is reasonable to conclude that the Australian government agency authorised the use of the information for the personal advantage of the registered tax practitioner, or for the advantage of an associate, employee, employer or client, the following factors may be relevant:
     • the use of the information for the personal advantage of the registered tax practitioner (or others) was expressly authorised by the government agency, either in writing or otherwise (for example, the formal engagement letter included a clause authorising the information to be used in such a manner)
     • the use of the information for the personal advantage of the registered tax practitioner (or others) was implied by the government agency, either in writing or otherwise.

Comparison with the Corporations Act for tax agents with a tax (financial) advice services condition

Case study 2 – Agency authorises continued engagement following disclosure of conflict of interest 

Situation

Max is a registered tax agent and a tax partner at a large accounting firm. Max’s clients include several large corporations. Max is an expert in company tax law and is often engaged by his clients to advise on how they may lawfully arrange their tax affairs to reduce tax that they may otherwise be liable for. He also regularly lectures on this topic at several Australian universities and has published numerous peer-reviewed articles on the matter.

Due to his expertise in this field, Max is engaged by The Treasury to assist in the design of several company tax law reform measures.

Max immediately documents and discloses the conflict of interest to The Treasury, advising of the nature and extent of the conflict of interest, and provides a broad overview of the nature of the advice and services he provides to his clients. He discloses to The Treasury that his clients include several large corporations that may be adversely impacted by the proposed reform measures. Further, Max provides The Treasury with an overview of how he intends to manage and mitigate the conflict should the engagement continue, noting (in the absence of The Treasury’s agreement to continue the engagement) his only option to avoid the conflict would be to decline the engagement. He informs The Treasury that he has taken the following steps to manage and mitigate the conflict of interest:

• recorded the conflict of interest on the firm’s conflict register
• reviewed the firm’s internal governance policies in relation to conflicts of interest, including the provisions concerning consequences for failing to comply with the procedures, to ensure compliance with those internal policies
• ensured that access to information concerning the reform measures is restricted to those who are also assisting in the design of the reform measures (assuming others are engaged to assist in the design of these reforms).  

Following the disclosure of the conflict of interest, The Treasury decides to continue with the engagement, noting the mitigating actions taken by Max and Max’s expertise in company tax law. The Treasury provides Max with its express written consent to continue with the engagement, providing Max implements appropriate mitigation measures and those measures continue to be consistent with the express consent throughout the engagement. In addition, The Treasury requests that Max not engage any clients who may be impacted by the proposed policy changes during the period of the engagement.

Conflict of interest

Max has met his obligation in section 20 of the Determination. 

Max has appropriately identified, documented, and disclosed the material conflict of interest to The Treasury. He has also provided The Treasury with details of how he intends to manage and mitigate the conflict of interest, noting that the conflict of interest may only be appropriately avoided if he declined the engagement with The Treasury.

In addition, throughout the engagement with The Treasury, Max at all times acts in a manner consistent with the express consent provided by The Treasury.

Case Study 3 – Conflict of interest considered not material 

Situation

John is a registered tax practitioner and expert on the Australian superannuation laws. John is engaged by an Australian government agency to provide advice in relation to a proposed superannuation reform package aimed at improving the fairness, sustainability, flexibility and integrity of the superannuation system. The proposed reforms are intended to apply to all superannuation funds.

John is a passive member of 123 Super Fund. Although John identifies that there is a conflict of interest given he is a member of a superfund that will be impacted by the proposed reform package, he assesses this conflict as one that is not material in the circumstances given the proposed reforms will apply broadly to all superannuation funds. Nonetheless, John documents and discloses the conflict to the government agency. 

Conflict of interest

John has met his obligation under section 20 of the Determination. 

Although John has identified that the conflict of interest in connection with the activities he is undertaking for the government agency is not material, he has nonetheless documented and disclosed the conflict to the government agency.

Even if John had not disclosed the conflict to the government agency, he would not have breached section 20 of the Determination given the conflict was not material. 

Case studies – section 25 of the Determination

132. These case studies provide general guidance only. In all cases, consideration will need to be given to the specific facts and circumstances. 

Case study 4 – Agency authorises disclosure of information to third party practitioner

Situation

Thomas is a registered tax agent and a tax partner at a mid-sized accounting firm. Thomas is invited to a set of confidential round table discussions led by The Treasury in relation to a proposed increase to tax rates that would largely impact high-wealth individuals. The proposed increase in the tax rates would impact a large portion of the firm’s client base. 

The invitation to participate in the round table discussions sets out the proposed terms of the engagement, including to whom information received in connection with any activities that Thomas is to undertake for The Treasury may be disclosed. The terms make it clear that a core group of expertise within the firm could be established to participate in the round table discussions and other dialogue in relation to the proposed tax-rate hike, but that the information could not be disseminated further.

Thomas asks two of the firm’s partners to participate in the engagement and this is communicated to, and authorised by, The Treasury. Throughout the engagement, Thomas discloses information to the two partners and no further disclosure of the information occurs.

Is there a breach of subsection 25(1) of the Determination?

Thomas has not breached subsection 25(1) of the Determination. 

It is reasonable to conclude that the information received in connection with the activities Thomas has undertaken for The Treasury was authorised by the department to be disclosed to the core group, noting in particular the proposed terms of engagement. In addition, Thomas and the core group did not disclose that information further. 

If the core group were to further on-disclose the information, it is unlikely that Thomas would be found to have breached subsection 25(1) of the Determination, particularly if Thomas had no knowledge of the on-disclosure. If, however, Thomas was to become aware of the on-disclosure, then he may be required to report the on-disclosure in accordance with his breach reporting obligations if either of the other two partners are registered tax practitioners. There may also be implications for the other partners forming the core group if they are registered tax practitioners. In this situation, it is likely that they would be found to be in breach of subsection 25(1) of the Determination. Depending on the circumstances, they may also be found to have breached subsections 30-10(1) of the TASA (failing to act with honesty and integrity) and / or may also be found to be no longer a fit and proper person to be registered as a tax practitioner. There may also be consequences for the registered tax practitioner firm, particularly if either of the partners were not a registered tax practitioner.

Case study 5 – Agency authorises disclosure of information to third party practitioner, but disclosure is inconsistent with that authorisation 

Situation

In Case Study 4, Thomas has been authorised to disclose certain information in relation to activities he is undertaking for The Treasury to a core group to be established within his firm. The authorisation provided to Thomas clearly states how that information is to be communicated to this core group, what information can be disseminated, what information is to remain strictly confidential and not be further disclosed to that core group, and for what purpose that information is to be used. Importantly, the authorisation clearly stipulates that any information shared with that core group is to be provided through email only (with a carbon copy (cc) to The Treasury) and not to be provided in printed form. 

Thomas asked two of the firm’s partners to participate in the engagement. Throughout the engagement, Thomas discloses information to the two partners. On several occasions, Thomas prints emails from The Treasury in relation to the confidential round table discussions, including confidential meeting papers, and provides those to the two partners. 

Is there a breach of subsection 25(1) of the Determination?

Thomas has breached subsection 25(1) of the Determination. 

It is not reasonable to conclude that the information received in connection with the activities Thomas has undertaken for The Treasury was authorised by the department to be disclosed to the core group in the manner in which it was disclosed, noting that the authorisation provided to Thomas by The Treasury clearly stipulated that information shared with the core group was to be shared through email only (with a cc to The Treasury). 

In breaching subsection 25(1) of the Determination, Thomas is in breach of subsection 30-10(17) of the Code in the TASA for making disclosures of the confidential information in a manner that was not consistent with The Treasury’s authorisation. 

Case study 6 – Agency does not authorise disclosure of information to third party practitioner

Situation

Isabella is a registered tax agent and a tax partner at a large tax consulting firm. Isabella is asked to participate in a confidential consultation by The Treasury in relation to new measures aimed at improving the tax laws. This confidential consultation included new rules to stop multinationals avoiding tax by shifting profits from Australia to tax havens overseas. 

The consultation papers distributed to Isabella were marked “under embargo”. In addition, Isabella was asked to sign a confidentiality agreement as part of her formal engagement. The confidentiality agreement signed by her clearly stipulated that any information received, directly or indirectly, in connection with any activities undertaken for The Treasury in relation to these new measures, is not for further dissemination and that any further disclosure would require the prior authorisation of the government agency. 

Throughout the engagement, Isabella made unauthorised disclosures of the confidential law reform to partners and staff within the consulting firm.

Is there a breach of subsection 25(1) of the Determination?

Isabella has breached her obligation under subsection 25(1) of the Determination. 

Isabella has disclosed information she received from The Treasury in connection with activities she undertook for the department in her professional capacity. Further, it is not reasonable to conclude in the circumstances that the information received by Isabella was authorised by The Treasury for further disclosure. 

In breaching subsection 25(1) of the Determination, Isabella is in breach of subsection 30-10(17) of the Code in the TASA for making unauthorised disclosures of the confidential information. Depending on the circumstances, the TPB may also find that Isabella is in breach of subsections 30-10(1) of the TASA (failing to act with honesty and integrity) and / or that she is no longer a fit and proper person to be registered as a tax practitioner. 

Case study 7 – Agency does not authorise use of information for personal advantage 

Situation

In Case study 6, during her engagement in the confidential consultation, Isabella became aware that clients of the firm would be impacted by the proposed new measures. Isabella chose to disclose the information received from The Treasury in connection with the activities she was undertaking for the department in her professional capacity for her personal advantage, noting that she stood to gain financially by disclosing the information to the partners of the firm whose clients would be impacted. Similarly, the partners, and others within the firm to whom the confidential information was also disclosed, would gain personally from the unauthorised disclosure, noting the financial benefit that would be gained by informing impacted clients prior to The Treasury publishing the draft legislation. 

Is there a breach of subsection 25(2) of the Determination?

Isabella has breached her obligation under subsection 25(2) of the Determination. 

In addition to the unauthorised disclosure of confidential information, Isabella has also used this information she received from The Treasury in connection with activities she undertook for The Treasury in her professional capacity for her personal advantage, and the personal advantage of others within the consulting firm. Further, it is not reasonable to conclude in the circumstances that the use of the information received by Isabella was authorised by The Treasury to be used in a way that may provide for such a personal advantage.

In breaching subsection 25(2) of the Determination, Isabella is in breach of subsection 30-10(17) of the TASA, for making unauthorised disclosures of the confidential information for her personal advantage. In the circumstances, it is possible that the TPB may also find that Isabella is in breach of subsections 30-10(1) of the Code in the TASA (failing to act with honesty and integrity) and / or that she is no longer a fit and proper person to be registered as a tax practitioner. 

Case study 8 – Agency does not authorise use of information for personal advantage

Situation

Adam is a registered tax practitioner and is employed by a recognised professional association as head of its tax training program. This program is designed to equip graduates with specialist tax knowledge, and upon completion of the program, a tax specialist certification. Adam has extensive experience over several decades in designing and delivering the curriculum of the program. His area of expertise is the taxation of trusts. 

Due to Adam’s experience in developing tax training programs, particularly on the topic of taxation of trusts, Adam is engaged by The Treasury to assist in drafting a consultation paper on proposed reforms to the taxation of trust income. 

Adam disclosed information in relation to the proposed reforms to the Chief Executive Officer (CEO) of the recognised professional association. He discussed his intention to commence work on developing a new training program that could be marketed and offered as soon as a public announcement was made on the proposed reforms. Both Adam and the recognised professional association stood to gain financially as a result of Adam’s disclosure of the confidential information, noting that the recognised professional association would gain a competitive advantage by commencing work on and releasing the tax training program into the market before other competitors. 

Is there a breach of subsection 25(2) of the Determination?

Adam has breached his obligation under subsection 25(2) of the Determination. 

In addition to the unauthorised disclosure of confidential information, Adam has also used this information he received from The Treasury in connection with activities he undertook for The Treasury in his professional capacity for his personal advantage, and the personal advantage of his employer (the recognised professional association). Further, it is not reasonable to conclude in the circumstances that the use of the information received by Adam was authorised by The Treasury to be used in a way that may provide for such a personal advantage.

In breaching subsection 25(2) of the Determination, Adam is in breach of subsection 30-10(17) of the TASA, for making unauthorised disclosures of the confidential information for his personal advantage, and the personal advantage of his employer. In the circumstances, it is possible that the TPB may also find that Adam is in breach of subsections 30-10(1) of the Code in the TASA (failing to act with honesty and integrity) and / or that he is no longer a fit and proper person to be registered as a tax practitioner. 

Case study 9 – Confidential information about third party taxpayer received when undertaking activities with the ATO in relation to a client

Situation

123 Limited is a widely held public company limited by shares and is listed on the Australian Stock Exchange (ASX). It is a resident of Australia for Australian tax purposes. 

In early 2023, 123 Limited announced to its shareholders that it was planning a corporate restructure. It engaged Joshua, a registered tax agent and partner at Firm 456, to oversee and advise on the tax implications of the corporate restructure, including any potential tax implications for shareholders of 123 Limited. 

Joshua, on behalf of 123 Limited, lodged an application for a Class Ruling in late 2023. The application sought the ATO view on the income tax consequences of the corporate restructure, particularly for current holders of ordinary shares in 123 Limited and whether those shareholders would be eligible for roll-over relief in relation to the proposed restructure. 

In early 2024, a draft Class Ruling was provided to 123 Limited. The Class Ruling set out the ATO’s draft view on the tax implications for 123 Limited and for shareholders of ordinary shares in the company. The draft Class Ruling was provided to Joshua on an in-confidence basis requesting a response from 123 Limited in relation to some minor aspects of the proposed corporate restructure.

Joshua shared the Class Ruling with the Board and Chief Executive Officer of 123 Limited only. It was not shared with shareholders.

Is there a breach of subsection 25(1) of the Determination 

Joshua has not breached subsection 25(1) of the Determination. 

It is reasonable to conclude that the information received in connection with the activities Joshua has undertaken with the ATO on behalf of 123 Limited was authorised by the ATO to be disclosed to 123 Limited. There was no further disclosure of the Class Ruling. 

Further information

133. Outlined below is a listing of reference material that may provide further guidance in relation to managing conflicts of interest and maintaining confidentiality.