'Illegal' Tax Advice Rife In Australia, Says Accounting Body

by Mary Swire, Tax-News.com, Hong Kong

15 March 2004

The Institute of Chartered Accountants in Australia (ICAA) has called on the ATO to address the growing problem of illegal tax advice after an ICAA survey revealed the practice was widespread throughout the tax industry.

According to the survey, based on the experiences of over 400 tax practitioners, the worst offenders were financial planners. 46% of respondents witnessed the giving of unqualified tax advice by this group. The practice was also prevalent amongst real estate agents (41%) and bookkeepers (23%). Insurance brokers, stockbrokers, banks, conveyancers and mortgage brokers also featured amongst the responses.

“We often get calls from members despairing at having to sort out tax problems of clients who have acted on questionable advice given by people not qualified to give it,” commented Stephen Harrison, chief executive of the ICAA.

“Our members have raised this as an issue that they are very concerned about. Their response to the survey was overwhelming, with many Chartered Accountants spending a considerable amount of time to provide us with case studies and detailed feedback on the issue,” Mr Harrison added.

He continued: “The increase in unqualified tax advice has a significant impact on Chartered Accountants, who are often left to clean up tax problems of clients that have acted on questionable advice given by people who are not qualified to give it. Our tax law already contains the necessary consumer protection mechanisms, yet nothing is being done to enforce or rectify this problem.”

“The ICAA, and other professional bodies, have been calling on the ATO for some time to provide guidance on the scope of the law regarding who can give tax advice, and to enforce it,” Harrison concluded.

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