House of Representatives

Explanatory Memorandum

Circulated By the Authority of the Treasurer, the Hon Wayne Swan Mp

Chapter 5 - The Tax Practitioners Board and its role

Outline of chapter

5.1 Part 6 of this Bill establishes a national Tax Practitioners Board (Board) and creates a framework for the conduct of investigations by the Board.

5.2 Specifically, Part 6 of the Bill provides that the Board is responsible for:

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registration of tax agents and Business Activity Statement (BAS) agents;

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conducting investigations and imposing sanctions for breaches of the Code of Professional Conduct (Code) where necessary; and

•

other functions that are incidental to the above responsibilities or are prescribed in the regulations.

5.3 Paragraph 70-10(i) of the Bill provides that a decision to extend the period of time within which an investigation is to be completed is reviewable by the Administrative Appeals Tribunal (AAT).

5.4 Subdivision 70-D of the Bill provides that the Board may delegate certain functions and powers to others and that Board members and committee members, both past and current, are immune from legal action for things done in good faith in the performance of the Board's functions or the exercise of the Board's powers.

5.5 Sections 70-35 to 70-45 of the Bill are the secrecy and disclosure provisions governing the use of information acquired under the Bill.

5.6 Section 70-50 of the Bill provides that the Bill does not affect the law relating to legal professional privilege.

Context of amendments

Operation of current provisions

5.7 Currently, the six state Tax Agents' Boards (state Boards) operate somewhat independently of one another. Each administers registration processes, disciplinary processes, investigations and evidence gathering activities in accordance with the same law, but may employ different administrative processes.

5.8 The separation of the state Boards has increased the risk of inconsistencies in the regulation and standards of tax agents, particularly in the administration of tax agent registrations and the handling of complaints and disciplinary matters.

5.9 Furthermore, while the current law provides for a Treasury Portfolio Minister to appoint members to each state Board, it does not:

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stipulate duration of appointments;

•

provide for a person once appointed to resign; or

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provide for the removal of Board members for cause.

5.10 Other deficiencies in the current system include:

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The state Boards are not required to report on their activities to the Minister or to the Parliament.

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The state Boards' powers are narrowly defined without sufficient flexibility to accommodate various circumstances.

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There is no statutory requirement for the conduct of investigations and disciplinary proceedings by the state Boards.

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The state Boards can apply different interpretations to similar circumstances in different states.

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The current administrative arrangements between the state Boards and the Australian Taxation Office (ATO) blur the responsibilities of the state Boards and the ATO. Both tax agents and taxpayers often regard the state Boards as merely an arm of the ATO.

Rationale for major changes

5.11 Part 6 of the Bill defines the role, functions, powers and reporting obligations of the Board. The primary purpose of Part 6 is to establish a single national board to register and regulate tax agents and BAS agents, with the powers to perform its functions effectively and the flexibility to allocate resources appropriately.

5.12 The new framework makes the responsibilities of the Board for investigations related to, and enforcement of, the law explicit. It provides for the Board to gather information and to hear and decide on complaints against tax agents and BAS agents. The investigation and enforcement role of the Board aims to ensure that agents comply with their obligations to their clients and the broader community.

5.13 The Board will be composed of a sufficient number of members to allow it to undertake its statutory functions and exercise its powers at a national level. All stakeholders within the system will benefit from the Board providing an efficient and effective national system of regulation and administration, with the flexibility to have such regional presence as may be required. This approach eliminates duplication of services and activities and inconsistencies in the interpretation of terms, rules and procedures.

5.14 The Board will be a statutory body that falls within the Treasury portfolio. The statutory functions and powers are vested in the Board independently of any other body including the ATO. Although the secretariat to the Board will be provided by the ATO, the secretariat must take its directions for the administration and operation of the Board from the Board itself.

Summary of new law

5.15 The Bill abolishes the six state Boards and creates a national Board.

5.16 The Board is vested with a number of functions and powers:

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The functions include administration of tax agent and BAS agent registration, investigation and the imposition of sanctions where necessary, and the performance of any other functions prescribed or required by the Bill and anything else incidental to the performance of the functions.

•

The Board may do all things necessary for the performance of its functions.

•

The Board also has the power to delegate many of its functions and powers to others, to establish committees to assist it and to determine its own procedures.

5.17 The Board consists of a Chair and at least six other members, appointed by the relevant Treasury Portfolio Minister (the Minister), holding office on a part-time or full-time basis.

5.18 A member may resign by notice provided to the Minister. The Minister may terminate the appointment of a member of the Board in certain circumstances.

5.19 A quorum at a Board meeting is constituted by a majority of the members appointed. Questions are decided by a majority of the votes of the Board members present and voting, with the Chair having a casting vote in the case of a deadlock.

5.20 The Board may investigate:

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applications for registration; and

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the conduct of tax agents, BAS agents and unregistered entities that may be in breach of a provision of the Bill.

5.21 The Board may establish a committee of one or more individuals to assist the Board in carrying out its functions and exercising its powers, including performing an investigation on its behalf.

5.22 The Board may compel the provision of information or summon witnesses and compel them to provide information for the purposes of the investigation.

5.23 Following an investigation, the Board must decide what action (if any) to take. (Part 5 of the Bill provides for the enforcement of certain decisions made as a result of an investigation - refer to Chapter 4 of this explanatory memorandum.)

5.24 Information acquired under the Bill may only be disclosed in limited circumstances.

Comparison of key features of new law and current law

Detailed explanation of new law

Functions and powers of the Tax Practitioners Board

Establishment

5.25 The Board is to be established at a time on or after the day on which the Bill receives Royal Assent. [Section 60-5 and subsections 1-5(1) and 90-1(1)]

5.26 Enabling the Board to be established on the day on which the Bill receives Royal Assent allows the Board time to perform preparatory work prior to the commencement of its functions - refer to paragraphs 1.25 to 1.29 in Chapter 1 of this explanatory memorandum for an explanation of the commencement dates of the Bill. The preparatory workload of the Board to effect a smooth transition to the new framework is expected to be significant.

5.27 Although section 4 of the Acts Interpretation Act 1901 provides for the exercise of certain powers between passage and commencement of an Act, reliance on this provision alone would not allow the members of the Board and committees that it may establish to be remunerated. In addition, some of the preparatory work that the Board may need to perform is likely to fall beyond the scope of section 4 of the Acts Interpretation Act 1901.

5.28 The Board has responsibility for regulating the provision of tax agent services in all Australian states and territories by reference to the Code and the system for the registration of tax agents and BAS agents and conduct of investigations set out in the Bill.

5.29 The Board is a statutory authority that falls within the portfolio responsibilities of the Treasurer. It is not itself a prescribed agency under the Financial Management and Accountability Act 1997 (FMA Act) and is not a body regulated by the Commonwealth Authorities and Companies Act 1997 (ie, the Board is neither a prescribed FMA Act agency nor a Commonwealth Authorities and Companies Act body) but is formally part of the ATO, a prescribed FMA Act agency.

5.30 To ensure that the Board has the requisite degree of independence from the ATO, it will be funded via a Special Account (under section 20 of the FMA Act) through the annual appropriation to the ATO. As such, the Board's annual appropriation will be quarantined within the ATO's funding. The Commissioner of Taxation (Commissioner) will provide resources to the Board within the limits of the Special Account.

5.31 In this way the Board will operate with decision-making independence from the ATO, but will rely on the ATO for administrative support. The Board will have available to it the resources necessary to perform its functions up to the amount of its Budget as determined by the Finance Minister. The exact nature of the service relationship and arrangements between the Board and the ATO will be determined through agreements between the two parties. Such agreements are likely to cover a number of issues including resourcing, technical support and legal support.

5.32 In the establishment phase, it is efficient for the Board to sit within the ATO, due to the administrative obligations that would otherwise apply to it as a separate agency and because the ATO provides the most appropriate functional fit for the Board from amongst existing prescribed FMA Act agencies.

5.33 However, this arrangement is intended to be the subject of a post-implementation review to be conducted three years after commencement of the Bill - refer to paragraph 6.71 in Chapter 6 of this explanatory memorandum. The key focus of the review will be to assess whether this arrangement remains appropriate and satisfactory. The review will consider whether the independence of the Board is impaired in any way because of its continued connection with the ATO, and whether an alternative arrangement should be considered.

Functions

5.34 The functions of the Board are to:

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administer the system for the registration of tax agents and BAS agents - registration of agents is discussed in detail in Chapter 2 of this explanatory memorandum;

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investigate applications for registration and conduct that may breach the Bill, including non-compliance with the Code - investigations are discussed in more detail below, and the Code is explained in Chapter 3 of this explanatory memorandum;

•

impose administrative sanctions for non-compliance with the Code;

•

issue guidelines, which are legislative instruments, to assist in achieving the functions outlined above;

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undertake other functions conferred on the Board by the Bill, the regulations, or any other law of the Commonwealth; and

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do anything else related to the performance of its functions.

[Section 60-15]

5.35 Guidelines issued by the Board are legislative instruments that bind the Board and those to whom they apply. Under the Legislative Instruments Act 2003, legislative instruments are generally required to be exposed for consultation with relevant parties, including those proposed to be affected by the instrument. They must be tabled in both Houses of Parliament and entered onto the Federal Register of Legislative Instruments by a specified date.

Powers

General power

5.36 The Board has the power to do all things necessary or convenient to be done to enable it to perform its functions. This gives the Board flexibility in the administration of the system. The Board's powers therefore include, but are not limited to, such things as issuing guidelines to determine the application of the principles of the Code. [Section 60-20]

Power to establish committees

5.37 The Board may establish committees, consisting of such person(s) as the Board thinks fit (whether or not Board members), to assist the Board in the performance of its functions and the exercise of its powers. Committees may be formed for a variety of purposes, for example, to assist with investigations, prepare draft guidelines or review training standards. [Section 60-85 and subsection 90-1(1)]

5.38 In determining the membership of committees, the Board may seek nominations for membership of committees at a time prior to the commencement of an investigation, thereby establishing a pool of people from which the Board may draw a committee when necessary. Alternatively, the Board may choose to establish committees as and when required, or to establish standing committees for certain matters. Committees do not have to contain or comprise Board members except in situations where a committee is being delegated certain functions or powers which may only be performed by a committee consisting of Board members only - refer to paragraph 5.44.

5.39 A key role for committees is to provide assistance with Board investigations. Having regard to the fact that most investigations will relate to breaches of the Code, the Board will select people with a sound reputation and qualifications and experience relevant to the matters dealt with by the Code. Experienced tax agents may often be appointed to a committee. Similarly, ATO personnel, members of recognised professional associations and recognised BAS agent associations, members of the legal profession, or professional investigators could be appointed to a committee. (Note, however, that ATO personnel would perform their role as committee members in their capacity as representatives of the Board, not of the ATO.) There may also be occasions where a person with special qualifications, but no specialised knowledge of the taxation laws, will be appointed to a committee.

5.40 A committee may be made up of one person or as many persons as the Board determines necessary or appropriate. For example, where a committee is established to investigate a complaint referring to a relatively minor issue, the Board may choose to investigate the complaint through an individual. On the other hand, where the complaint is of a more complex or serious nature, the Board may choose to appoint a committee with several members.

5.41 Members of committees are remunerated and compensated in the same way as Board members, that is, by determination of the Remuneration Tribunal and/or as prescribed in regulations - refer to paragraphs 5.66 and 5.67 for an explanation of remuneration arrangements for Board members. [Section 60-90]

Power to delegate

5.42 The Board has the power to delegate any of its functions and powers to a Board member or a committee, except the following:

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its function of issuing guidelines;

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the power to establish a committee; and

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the power to make decisions that give rise to a right of appeal to the AAT for review of the decision.

[Subsections 70-30(1) and (2)]

5.43 In addition, under section 34AB of the Acts Interpretation Act 1901 , the Board may not delegate its power to delegate.

5.44 The Board may only delegate its power to make decisions that give rise to a right of appeal to the AAT for review of the decision to a committee that consists of three or more Board members and no non-Board members. [Subsection 70-30(2)]

5.45 The Board's ability to delegate certain functions and powers will improve its ability to manage its resources and workload, without exposing it to risk. In particular, functions which do not have the potential to impact significantly on a person's livelihood, such as many of the routine administrative functions, may appropriately be performed by others.

5.46 Any delegation must be in writing and may be revoked at any time by the Board. A delegation is not affected by a change in the membership of the Board. Therefore, a delegation continues in force even if the membership of the Board changes and may be revoked even if the Board is not constituted by the members who constituted the Board when the delegation was made. [Subsections 70-30(1) and (4)]

5.47 In exercising the power that has been delegated, the delegate is subject to the directions of the Board. [Subsection 70-30(3)]

Immunity from legal action

5.48 Members or past members of the Board, and members or past members of committees established by the Board to assist it, are immune from legal action in connection with their activities undertaken in good faith as members of the Board or Board committees. No action, suit or proceeding may be brought against such members in relation to anything they do, or fail to do, in good faith in the performance (or purported performance) of the Board's functions or in the exercise (or purported exercise) of the Board's powers. [Section 70-25]

Structure of the Tax Practitioners Board

Composition of the Board

5.49 The Board consists of:

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a Chair; and

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at least six other members.

[Subsection 60-10(1)]

5.50 The Bill provides for a minimum of seven Board members. There is no maximum number of Board members.

Appointments and process for appointment

5.51 The Minister is responsible for appointing members of the Board and for appointing one of the members of the Board to be the Chair. Appointments must be in writing. [Subsections 60-25(1) and (2) and 90-1(1)]

5.52 The Chair cannot be a member of the Board who holds any office or appointment under a law of the Commonwealth (other than as a member of the Board) or is appointed or engaged under the Public Service Act 1999. This restriction enhances the operational independence of the Board, in particular its independence from the ATO. [Subsection 60-25(2)]

5.53 An individual's appointment as a member of the Board is not invalid because of a defect or irregularity in connection with the person's appointment. [Subsection 60-25(3)]

5.54 In appointing a Board member, the Minister may determine, in writing, any terms or conditions relating to matters that are not provided for in the Bill. A Board member therefore holds office on the terms and conditions outlined in Part 6 of the Bill - refer to paragraphs 5.59 to 5.71 - and the Minister's determination, if any. [Section 60-65]

5.55 Appointment of Board members needs to be consistent with the selection arrangements for statutory appointments which ensure transparent and merit-based assessment in the selection of statutory officeholders. It is expected that a vacancy will be advertised. Candidates for appointment to the Board may be nominated by a recognised professional association, a recognised BAS agent association, the Commissioner or a legal professional association, or may respond of their own accord to an advertised vacancy.

5.56 While it is likely that the Minister will appoint members with an appropriate level of qualifications and experience, relevant to the tax profession, the Minister may appoint a community representative, or a person with special qualifications or experience. The Board represents all segments of the community/industry that it regulates, including the emerging BAS agent industry.

5.57 Although ATO employees (who are appointed or engaged under the Public Service Act 1999 ) may hold Board membership (other than as the Chair - refer to paragraph 5.52), it would be unusual for more than two ATO employees to be appointed to the Board at any one time. The Bill does not require there to be any ATO employees on the Board.

Vacancies

5.58 The performance of the functions or the exercise of the powers of the Board is not affected by a vacancy or vacancies in the membership of the Board. [Subsection 60-10(2)]

Duration, basis and terms of office

Duration and basis

5.59 Members of the Board hold office for a period determined by the Minister and specified in the written instrument of appointment. Members are eligible for reappointment on expiry of the term of appointment. The terms of members of the inaugural Board may be staggered to facilitate a smooth integration of future members and maintain corporate knowledge. [Section 60-30]

5.60 Office - including that of the Chair - is held on either a part-time basis or a full-time basis. This flexibility recognises that:

•

on the one hand, some Board members hold full-time employment elsewhere, so that a part-time appointment to the Board will not require members to forego their usual employment. Part-time appointment does not prevent Board members from working full-time hours when necessary and convenient. Part-time office provides flexibility around the management of the Board's workload - the workload is expected to be greater during and immediately following the establishment of the Board and the commencement of the rest of the Bill, but is likely to stabilise over time; and

•

on the other hand, some applicants for appointment to the Board may only be interested in a full-time appointment.

[Subsection 60-25(1)]

Leave of absence

5.61 Leave of absence (other than recreation leave, in the case of full-time members of the Board) may be granted by the Minister on the terms and conditions determined by the Minister. In practice, it is expected that members' leave of absence arrangements will be determined and agreed as part of the general terms and conditions of appointment. [Subsections 60-40(2) and (3)]

5.62 Individuals appointed to the Board on a full-time basis are entitled to recreation leave as determined by the Remuneration Tribunal. [Subsection 60-40(1)]

Outside employment and disclosure of interests

5.63 The Bill provides for certain restrictions on engaging in paid employment other than membership of the Board.

5.64 Full-time Board members are prohibited from undertaking paid employment elsewhere without the Minister's approval. Part-time Board members are permitted to hold paid employment elsewhere as long as that employment does not conflict, or have the potential to conflict, with the proper performance of the member's duties on the Board. [Section 60-45]

5.65 Board members must disclose, to the Minister in writing, certain direct or indirect pecuniary interests that the member has or acquires. Such interests are those that conflict (or have the potential to conflict) with the proper performance of the Board's functions. Failure, without reasonable excuse, to give written notice of such interests to the Minister may result in the termination of the member's appointment. [Section 60-50 and paragraph 60-60(1)(c)]

Remuneration and allowances

5.66 The members of the Board are to be paid:

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such remuneration as is determined by the Remuneration Tribunal;

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if the Remuneration Tribunal has not made a determination of remuneration, or if such a determination is not in operation, Board members are to be paid such remuneration as is prescribed in regulations; and

•

such allowances as are prescribed in regulations.

[Subsections 60-35(1) and (2)]

5.67 Remuneration and allowances are subject to the Remuneration Tribunal Act 1973. The Remuneration Tribunal, an independent statutory body, is responsible for determining remuneration and related matters for Commonwealth statutory officeholders and certain other offices, including the Board and its committees. The Remuneration Tribunal Act 1973 outlines the functions and powers of the Remuneration Tribunal. [Subsection 60-35(3)]

Termination of appointment

Resignation by a member

5.68 Ordinarily, a member who wishes to resign from membership of the Board or the Chair who wishes to resign his or her appointment as the Chair will give the Minister written notice of resignation. The notice must specify a date from which the member or the Chair proposes that the resignation will take effect. The Chair may resign his or her appointment as the Chair without also resigning his or her appointment as a member of the Board. [Section 60-55]

Termination by the Minister

5.69 The Minister may terminate the appointment of a member prior to the expiry of the member's term on one or more of the following grounds:

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misbehaviour [paragraph 60-60(1)(a)] ;

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mental or physical incapacity to perform duties [paragraph 60-60(1)(a)] ;

•

the member becomes bankrupt, applies to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounds with creditors, or makes an assignment of remuneration for the benefit of creditors [paragraph 60-60(1)(b)] ; or

•

the member fails, without reasonable excuse, to comply with the requirement to notify the Minister in writing of any direct or indirect pecuniary interests that conflict or could conflict with the Board's functions [paragraph 60-60(1)(c)] .

5.70 Additional grounds for termination of the full-time appointment of a Board member are:

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the member is absent for 14 consecutive days without leave of absence [paragraph 60-60(2)(a)] ;

•

the member is absent for 28 days in any 12-month period without leave of absence [paragraph 60-60(2)(a)] ; or

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the member engages in paid employment outside his or her duties as a Board member without the Minister's approval [paragraph 60-60(2)(b)] .

5.71 Additional grounds for termination of the part-time appointment of a Board member are:

•

the member is absent from three consecutive meetings of the Board without leave of absence [paragraph 60-60(3)(a)] ; or

•

the member engages in paid employment that conflicts or could conflict with the proper performance of the duties of office [paragraph 60-60(3)(b)] :

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Employment as a tax agent or BAS agent, or employment in a professional association or the ATO, for example, is not employment that ordinarily would conflict with the performance of duties as a member of the Board.

Board procedures

Meetings

5.72 The Board may regulate proceedings at its meetings in any way that it considers appropriate. For example, this may include such things as determining the priority and nature of agenda items, circulating an agenda in advance of each meeting, and circulating minutes following a meeting. The Board may also determine its approach to managing conflicts of interest of Board members. [Subsection 60-70(5)]

5.73 At a meeting of the Board a quorum is constituted by a majority of Board members appointed. Subsection 33B(3) of the Acts Interpretation Act 1901 provides explicitly that a member who participates in a meeting via telephone or other means of communication, such as a video-link, is taken to be present at the meeting. [Subsection 60-70(1)]

Example 5.1

The Board has eight members. At the time of one of the Board's meetings, two members are absent overseas, one member is absent due to illness, and one further member, Maria, is unable to attend in person due to other commitments. Maria participates in the discussion and decisions made during the meeting via video-link.

There are, therefore, four members present at the meeting and one participating by video-link. In this case, the quorum requirement of five members is met.

5.74 A question arising at a meeting is decided by a simple majority of the votes of the members of the Board present and voting. [Subsection 60-70(2)]

5.75 The Chair presides at all meetings at which he or she is present. If the Chair is unable to attend a meeting, the members present must appoint one of themselves to preside. Consistent with the restriction on appointments to the position of Chair, the Board member appointed to preside over a meeting of the Board in the Chair's absence cannot be a member who holds any office or appointment under a law of the Commonwealth (other than as a member of the Board) or a person appointed or engaged under the Public Service Act 1999. (This means that a meeting will not be able to proceed in the event that only members who are also engaged or appointed under a Commonwealth law other than the Bill are in attendance. In practice, it is expected that the number of Board members who are also engaged or appointed under a Commonwealth law other than the Bill will be few, so this situation is unlikely to arise.) [Subsection 60-70(3)]

5.76 The Board member presiding at a meeting has a deliberative vote and, in the event of an equality of votes, a casting vote. (A deliberative vote is a vote that expresses an individual's opinion on a matter being deliberated. A casting vote, or deciding vote, is a vote given to the presiding officer in order to resolve a deadlock.) [Subsection 60-70(4)]

Decisions without meetings

5.77 A decision can be made in the absence of a meeting if the Board has determined that the decision may be made without meeting and decided the method by which its members are to indicate agreement (or otherwise) with the proposed decision. [Subsections 60-75(1) and (3)]

5.78 Once these procedures have been determined, a decision is taken to have been made at a meeting of the Board if:

•

all of the members of the Board were informed of the proposed decision, or reasonable efforts were made to inform all the members of the proposed decision; and

•

a majority of the Board indicates agreement with the proposed decision in accordance with the method determined by the Board for indicating such agreement.

[Subsection 60-75(2)]

5.79 The purpose of this subsection is to ensure that part-time membership does not inhibit the functioning of the Board, while providing assurance that all Board members have the opportunity to consider and express their opinions on a matter before it is decided.

5.80 The Board must keep a record of all decisions made without meetings. [Subsection 60-75(4)]

Administrative support

5.81 The Board secretariat is to be staffed by persons engaged under the Public Service Act 1999. The Commissioner is responsible for making the services of such individuals available to the Board. This arrangement will be subject to the post-implementation review - refer to paragraph 5.33. [Section 60-80]

5.82 In performing services for the Board, an individual whose services have been made available by the Commissioner is subject to the directions of the Chair of the Board, provided they do not conflict with the requirements of other legislation and guiding rules (eg, the Public Service Act 1999 and the Australian Public Service Code of Conduct).

5.83 To the extent that an individual is doing things other than assisting with the execution of the Board's statutory functions or powers, the individual is simply acting as an officer of the ATO who is charged with doing things to assist the Board. In these contexts, the individual should be subject to direction by the Commissioner, provided that any particular direction does not hinder the Board's independent performance of its functions or exercise of its powers.

Investigation procedures

5.84 An important function of the Board is to investigate matters relating to alleged or potential breaches of the provisions of the Bill. The investigation procedures outlined in the Bill provide a mechanism for grievances to be heard, ensure that the Board will make considered decisions, and allow for sanctions or penalties to be imposed where appropriate.

5.85 The Board has the power to investigate matters relating to any aspect of its responsibilities, in particular:

•

an application for registration as a tax agent or BAS agent;

•

any conduct that may be considered to be a breach of the Code or any other section of the Bill; and

•

any other matter prescribed by the regulations.

[Subsection 60-95(1)]

Commencing an investigation

5.86 An investigation may arise as a result of a complaint made by a third party (such as a client, an employee of a tax agent or BAS agent, a member of the public or the Commissioner) about an agent's conduct, or the Board may decide to initiate an investigation of its own accord.

5.87 When a complaint is made to the Board, the Board will determine whether the complaint is one of substance and whether an investigation is warranted. To do this, the Board may need to gather preliminary information. It may do this by any means it sees fit, for example, by inquiry of the complainant and/or the tax agent or BAS agent to whom the complaint pertains, or by requesting and reviewing documentation provided by the complainant, the client, or obtained from the ATO.

5.88 Following its preliminary inquiry, if the Board decides to investigate a matter, it must notify the tax agent, BAS agent, unregistered entity or applicant for registration, as appropriate, in writing, within two weeks after the decision to investigate. The Board is not required to notify the complainant (if any) of its commencement of an investigation, however it may choose to do so. [Subsection 60-95(2)]

Example 5.2

Allister is unhappy with the services provided to him by his tax agent Ms Fish, a partner of the registered tax agent Fish & Associates. He raises his concerns with Ms Fish but is not satisfied with the response and complains to the Board.

Leo, an employee of the Board Secretariat, receives Allister's letter of complaint. He commences gathering preliminary information by contacting Ms Fish to discuss Allister's claim. Leo requests copies of relevant documentation from Ms Fish and seeks her view on the complaint. Leo also contacts Allister to advise him that the Board is reviewing his complaint and requests that he provide copies of documentation held by him.

After gathering preliminary information, Leo presents this information to the Board. The Board meets and decides to investigate the matter further. The Board notifies Ms Fish formally that it has decided to investigate the complaint. This notification is made in writing within two weeks after the day on which the Board decided to commence an investigation.

5.89 An investigation is taken to have commenced on the date of the Board's written notice of its decision to investigate. [Subsection 60-95(3)]

Example 5.3

The Board receives a complaint against WWW Co., a registered tax agent, on 1 June. Over the course of several months, the Board Secretariat undertakes preliminary inquiries in relation to WWW Co. and recommends to the Board that an investigation be undertaken. The Board considers the recommendation and decides that an investigation is warranted on 15 October. The Board notifies WWW Co. accordingly on 22 October (within two weeks after the decision). The investigation is taken to commence on 22 October rather than 1 June.

Referral of complaints

5.90 Where the Board receives a complaint that an unregistered entity is providing tax agent services or BAS services for a fee or other reward, the Board may conduct an investigation. If the investigation concludes that the unregistered entity was operating unlawfully, the Board may apply to the Federal Court of Australia (Federal Court) for a civil penalty order or an injunction. This is explained in Chapter 4 of this explanatory memorandum.

5.91 The Board may also refer certain matters to other agencies. Under the Bill, Board members may only disclose information they acquire under the Bill in the performance of their duties under or in relation to the Bill. In addition, Board members may disclose information acquired under the Bill to the Commissioner and to certain law enforcement agencies for the purpose of investigating certain criminal offences - refer to paragraphs 5.134 to 5.151 for an explanation of the secrecy and disclosure provisions in the Bill.

Conducting an investigation

5.92 The Board may determine its own procedures for the conduct of investigations. This flexibility allows the Board to conduct investigations in a way that is the most efficient and appropriate in the circumstances. [Paragraph 60-95(4)(a)]

5.93 The Board may choose to issue or publish guidelines (which are legislative instruments) on the conduct of investigations for the information of committee members, tax agents, BAS agents and applicants for registration.

5.94 In conducting investigations, the Board is not bound by the rules of evidence. Normally, the rules of evidence apply to judicial decision-making processes, not administrative decision making processes. The Board may therefore conduct its investigation with as little formality as feasible and as expeditiously as a proper consideration of the matters of the investigation permits. The investigation process should not be prolonged or overly onerous on the entity being investigated. [Paragraph 60-95(4)(b)]

5.95 Although the rules of evidence do not apply, the Board is required to use its best judgment in conducting investigations and the rules of evidence may provide the best guide. For example, if a witness declines to verify a statement by oath or affirmation, the Board could be expected to accord that evidence little weight.

5.96 The administrative law principles of natural justice (which include the requirement for procedural fairness) apply to the Board's investigations. This would involve, among other things, giving the entity being investigated the right to be informed of the detail of the complaint and the opportunity - including sufficient time - to be heard in response.

Gathering information

5.97 For the purposes of conducting an investigation, the Board may seek information by notice in writing. It has the power to require a person to:

•

provide the Board with the information referred to in the notice [paragraph 60-100(1)(a)] ;

•

provide the Board the documents or things referred to in the notice [paragraph 60-100(1)(b)] ; and/or

•

appear before the Board to give evidence or to produce documents or other things referred to in the notice [subsection 60-105(1)] .

5.98 Sections 8C and 8D of the Taxation Administration Act 1953 (TAA 1953) provide for offences relating to failure to give information, failure to produce records, documents or things, failure to attend, failure to take an oath or make an affirmation, failure to answer questions and other matters when required under a taxation law. Section 8C provides for an absolute liability offence while section 8D provides for a strict liability offence. For strict liability offences, the common law permits a defence of honest and reasonable mistake of fact. Absolute liability offences do not allow such a defence.

5.99 When the Board requests the production of a document or thing, the request must be in writing and must specify the period within which the person must comply with the request. The period specified must be at least 14 days after the date of request to give the person sufficient time to comply without impeding the Board's efficient conduct of its investigations. [Subsection 60-100(2)]

5.100 The Board may request information from any person, including ATO officers, for the purpose of an investigation.

5.101 For the purpose of taking evidence, the Chair of the Board, or an individual acting on behalf of the Chair, may require a person to either take an oath or make an affirmation. The oath or affirmation is an undertaking that the evidence to be given is true. For this purpose, the Chair or individual acting on behalf of the Chair may administer the oath or affirmation. [Subsections 60-110(1) and (2)]

5.102 Persons who appear before the Board for the purpose of an investigation are entitled to be paid an allowance and expenses, if any, to compensate them for the time and expense incurred in carrying out their role. Allowances and expenses are as prescribed by the regulations. [Subsections 60-105(2) and (3)]

5.103 The entity that is liable to pay the allowance and expenses (if any) in various circumstances is set out in Table 5.1.

Table 5.1

[Subsections 60-105(2) and (3)]

5.104 A witness who has been sworn, or who has made an affirmation, may be allowed to give evidence by tendering a written statement rather than appearing in person before the Board. In this case, the statement must be verified by oath or affirmation. An oath or affirmation in the form of an affidavit would satisfy the requirements of this provision of the Bill. [Subsection 60-110(3)]

5.105 The Board may take possession of documents and things provided to it during the course of an investigation. It may make copies of such documents or things and take extracts from such documents as it considers appropriate or necessary. It may retain such documents and things for as long as is necessary for the purpose of the investigation. [Subsection 60-120(1)]

5.106 While the Board has possession of the document or thing, the Board must allow reasonable access to it by a person who would otherwise be entitled to possess the document or thing, including a person authorised by that person. Reasonable access to a document must be provided for the purpose of inspecting it, making copies of it and taking extracts from it. [Subsection 60-120(2)]

Self-incrimination

5.107 A person required to provide information or evidence or produce a document or thing to the Board for the purpose of an investigation must do so even if doing so might incriminate the person or otherwise expose them to a penalty. This requirement prevents self-incrimination privileges from being used to obstruct the Board from obtaining information for the proper conduct of its investigations. It therefore protects the integrity of investigations conducted by the Board and enables the Board to enforce the efficient and timely collection of accurate information to conduct its investigations. [Subsection 60-115(1)]

5.108 While persons required to provide information or evidence or produce a document or thing must do so even if doing so may incriminate them, in the case of an individual, there are limits on the subsequent evidentiary use of:

•

the information, evidence, document or thing given or produced, as the case may be, during the course of an investigation;

•

the giving or producing of the information, evidence, document or thing; and

•

any information, document or thing obtained as a direct or indirect consequence of giving or producing the information, evidence, document or thing.

[Subsection 60-115(2)]

5.109 The information acquired by the Board by abrogating the self-incrimination privilege can only be admissible evidence in specified proceedings that relate only to the provision of information and the quality (or accuracy) of the information provided during investigations by the Board. These specified proceedings are:

•

proceedings for an offence against section 8C or 8D of the TAA 1953 that relate to the Bill. These sections refer to failure to comply with requirements under a taxation law and failure to answer questions when attending before the Commissioner or another person pursuant to a taxation law (eg, the Board), respectively;

•

proceedings for an offence against section 137.1 or 137.2 of the Schedule to the Criminal Code Act 1995 that relate to the Bill. These sections deal with false or misleading information and false or misleading documents, respectively; and/or

•

proceedings for an offence against section 149.1 of the Schedule to the Criminal Code Act 1995 that relate to the Bill. This section deals with obstruction of Commonwealth public officials.

[Subsection 60-115(2)]

Legal professional privilege

5.110 The investigation powers established by Part 6 do not override the principle of confidentiality of communications between legal practitioners and their clients. The Bill does not affect the law relating to legal professional privilege. [Section 70-50]

Outcome of investigation

Decision

5.111 The Board must make a decision following an investigation.

5.112 If the investigation relates to an application for registration under section 20-20 of the Bill, the Board must make a decision in accordance with section 20-25. That is, the Board must grant registration if the applicant is eligible for registration of the type applied for, or decline to register the applicant (details are provided in Chapter 2 of this explanatory memorandum). [Subsection 60-125(1)]

5.113 If the investigation relates to conduct that may breach the Bill and the Board finds that the conduct breaches the Bill, the Board must either:

•

make a decision that no further action will be taken in relation to the investigation [paragraph 60-125(2)(a)] ; or

•

do one or more of the following:

-

impose one or more sanctions under Subdivision 30-B (administrative sanctions are discussed in Chapter 3 of this explanatory memorandum) [subparagraph 60-125(2)(b)(i)] ;

-

terminate an entity's registration under Subdivision 40-A (discussed in Chapter 2 of this explanatory memorandum) [subparagraph 60-125(2)(b)(ii)] ;

-

apply to the Federal Court for an order requiring payment of a pecuniary penalty under Subdivision 50-C (discussed in Chapter 4 of this explanatory memorandum) [subparagraph 60-125(2)(b)(iii)] ; or

-

apply to the Federal Court for an injunction under section 70-5 [subparagraph 60-125(2)(b)(iv)] .

Timeframe for the making of a decision

5.114 The Board must generally make its decision within six months after the date of the Board's written notice of its decision to investigate. This limitation on the time for investigations minimises uncertainty for the applicant, unregistered entity or registered entity who is the subject of the investigation. [Subsection 60-125(3)]

5.115 In some cases, six months will be insufficient time to finalise an investigation. Where a delay in the conduct of an investigation is caused by reasons beyond the control of the Board, the Board has the discretion to determine a longer period within which to make its decision. This discretion must be exercised at least two weeks before the expiry of the initial six-month period, and may only be exercised once. If a longer period is determined, the Board must make its decision within that longer period. [Subsections 60-125(3) to (5)]

Example 5.4

The Board receives a complaint about Pru, a registered tax agent. After conducting preliminary inquiries, the Board decides to investigate the matter. The Board refers the complaint to an investigating committee and issues a notice to Pru within two weeks after its decision to investigate.

During the investigation, Pru notifies the Board that her home and office have been severely damaged in a tropical cyclone and that, as a result, she will have trouble producing the documentation by the deadline that the investigating committee originally set. Given this delay, the Board decides to extend the investigation period by six months. The Board then notifies Pru of its decision.

5.116 'Reasons beyond the control of the Board' may include, but are not limited to, the following:

•

delay caused by the subject of the investigation;

•

delay caused by a person giving evidence; and

•

where the complexity of the investigation is such that it is not feasible to complete the investigation thoroughly and with due regard to the requirements of legislation in the allocated timeframe.

[Subsection 60-125(6)]

5.117 The Board's decision to extend the period of time within which an investigation is to be completed is reviewable by the AAT. The right to review allows those persons whose interests have been affected by the decision (depending on the circumstances and the reviewable decision itself, this may include the registered entity, a complainant, or the ATO) to question the Board's exercise of its power - refer to paragraph 2.67 in Chapter 2 of this explanatory memorandum for further explanation of the AAT review of Board decisions. [Paragraph 70-10(i)]

Example 5.5

The Board gathers preliminary information in relation to a complaint that it received about Daniel, a registered BAS agent, and notifies Daniel on 13 March that it has commenced an investigation into the matter. The Board appoints a committee to investigate, and the committee proceeds to gather evidence and interviews relevant persons.

Five months after commencing the investigation into Daniel's conduct, the investigating committee informs the Board that it will not be able to make a recommendation on the case within the six-month timeframe. The reasons for the delay are that the committee has had trouble contacting a key witness, Daniel has not been cooperative and the issues under consideration are of a very complex nature. The committee recommends that the investigation period be extended by three months.

Because of the time limit on investigations and the availability of the discretion to extend the time limit, on 28 August the Board accepts the committee's recommendation and decides to extend the deadline for a further three months, to 13 December. On 24 September (within 30 days of the decision) it notifies Daniel in writing of its decision and reasons and advises him that this decision is reviewable by the AAT. Daniel disagrees with the Board's reasons and seeks a review by the AAT.

5.118 If the Board does not make a decision within the six-month period or within the longer timeframe determined by the Board, then its decision is taken to be that no further action is warranted in relation to the matter that was the subject of investigation. [Subsection 60-125(7)]

Notification of decisions

5.119 The Board must notify certain parties if the Board investigates conduct that may breach the Bill and either finds that the conduct breaches the Bill or finds that the conduct does not breach the Bill. Notice must be given in writing within 30 days of the Board's decision or finding. [Subsection 60-125(8)]

5.120 The Board must notify the affected entity of its decision or finding following an investigation and provide written reasons for the decision. If the decision or finding is relevant to the administration of the taxation laws (other than the Bill), notice of the decision or finding and the reasons must be provided to the Commissioner. The complainant, if any, is also entitled to receive notice of the decision or finding following an investigation. [Subsection 60-125(8)]

5.121 When the Board determines a longer period for making a decision as described in paragraph 5.115, it must notify the entity affected by that determination of the determination in writing. Such notification must be provided within 30 days of the determination and must provide reasons why the longer period is required. [Subsection 60-125(9)]

5.122 Board decisions following an investigation are reviewable by the AAT, except for decisions to take no further action, to issue a caution and decisions to apply to the Federal Court for an order that the tax agent or BAS agent pay the Commonwealth a pecuniary penalty or for an injunction. [Section 70-10]

Reporting and disclosure obligations of the Tax Practitioners Board

Annual report

5.123 The Chair of the Board is responsible for ensuring that an annual report on the operation of the Board is prepared and given to the Minister for presentation to the Parliament. The report must be prepared and provided to the Minister as soon as practicable after the end of each financial year. Note that the Board's periodic reporting requirements to Parliament are governed by section 34C of the Acts Interpretation Act 1901. [Subsection 60-130(1)]

5.124 To fulfil the Board's reporting obligation, the annual report must include certain information relating to the Board's disclosure of information to law enforcement agencies - refer to paragraph 5.145. [Subsection 60-130(2)]

5.125 The Minister must table a copy of the report provided by the Chair of the Board in each House of the Parliament within 15 sitting days of each House following receipt of the report.

Publication of information

On the Internet

5.126 The Board must establish and maintain a register on the Internet of:

•

every entity that is registered under the Bill; and

•

entities that have had their registration terminated, except where the termination occurred due to:

-

the entity surrendering its registration; or

-

a reason prescribed in the regulations.

[Subsections 60-135(1) and (4)]

5.127 For each tax agent and BAS agent, and each entity listed on the Internet whose registration has been terminated, the register must include the details that are prescribed in the regulations. [Subsection 60-135(2)]

5.128 In the case of those entities listed on the Internet whose registration has been terminated, the entry is only required to be maintained on the register for 12 months starting on the day on which the entity's registration was terminated, that is, the day on which the termination takes effect. [Subsection 60-135(3)]

5.129 A 12-month period will assist agents to comply with the civil penalty for employing or using the services of a deregistered entity within one year of termination of its registration. It also balances the protection of taxpayers (by providing transparency) with the need to not inhibit an individual's future employment or other provision of services in the industry.

5.130 A register of tax agents and BAS agents is a valuable resource for taxpayers who wish to locate and engage a tax agent or BAS agent to obtain tax agent services.

Example 5.6

Olga, an individual registered as a tax agent, is an employee of B-Best Taxation & Accounting Services, a registered tax agent. Following preliminary inquiries, the Board appoints a committee to investigate its concerns about various aspects of Olga's conduct over the past few months. The Board's decision following investigation results in Olga's registration being suspended for six months. Details of Olga's suspension are listed on the Board's website.

Olga is an associate member of a recognised professional association. Because the information has been made available publicly on the Board's website, the public, including Olga's recognised professional association, will be alerted to Olga's suspension. This enables the association to take appropriate disciplinary action if it chooses to do so.

In the Commonwealth of Australia Gazette

5.131 The Board must cause a notice of certain decisions to be published in the Commonwealth of Australia Gazette. The decisions that must be published are decisions under Subdivision 30-B or Subdivision 40-A to terminate the registration of a tax agent or BAS agent and decisions under section 30-25 to suspend the registration of a tax agent or BAS agent. [Section 60-140]

5.132 The requirement to cause a notice of such suspension and termination decisions to be published in the Gazette allows the application of section 153 of the Evidence Act 1995, which provides that notices in the Gazette are prima facie evidence of the notification.

5.133 Note that where the Board has terminated the registration of an entity under Subdivisions 30-B and 40-A for a reason related to their character, the deregistered tax agent or BAS agent cannot apply for registration for a period of up to five years, as determined by the Board. [Section 40-25]

Protection of information obtained under the Bill

5.134 In order to maintain the privacy and confidence of entities interacting with the tax system, the secrecy provisions in the taxation laws impose strict obligations on those who receive information under a taxation law. Consistent with this, and given that the Bill will be a taxation law - refer to paragraph 1.32 in Chapter 1 of this explanatory memorandum - information obtained under the Bill will be subject to a high level of protection.

5.135 Information that relates to and can identify a person will be protected. There are no limitations on the use of information that is purely of an administrative or procedural nature that does not contain any personal information (and, consequently, in relation to which there are no privacy concerns). To be protected, the information must have been obtained by a person in the course of his or her duties under or in relation to the Bill or the regulations. It therefore does not include information obtained in a private context. [Paragraph 70-35(1)(b)]

5.136 A limitation on the use of protected information is imposed on a range of persons who perform duties under or in relation to the Bill or regulations. While this clearly includes past or current Board members, committee members and ATO officers providing administrative support to the Board, it also applies to any person who is or was employed by, or is or was engaged to provide services for, the Commonwealth. [Paragraph 70-35(1)(a)]

Example 5.7

Michael, an IT professional, is contracted to develop and maintain for the Board a database that will store information relating to applications for registration. In the course of his duties, Michael has access to a considerable amount of information relating to individual applicants. Notwithstanding that Michael is not a Board member, a member of a committee or otherwise an Australian Public Service employee appointed to assist the Board, Michael's use of the information is restricted by the provisions of the Bill.

5.137 ATO officers who provide services to the Board and perform duties under the Bill are subject to the secrecy provisions in the Bill. Therefore, an ATO officer cannot disclose or record information he or she acquired in performing functions for the Board, even if another provision of a taxation law ostensibly authorises such a disclosure or record unless permitted to do so by the provisions in this Bill.

5.138 If a person discloses or makes a record of information other than in accordance with the Bill they commit an offence that is punishable by two years imprisonment. [Subsection 70-35(1)]

5.139 This prohibition applies to disclosures of information to another person, and 'another person' includes a Minister, court or tribunal. [Subparagraph 70-35(1)(c)(i)]

5.140 However, no offence is committed if a person discloses or makes a record of the information under or for the purposes of the Bill or regulations or in the course of their duties under or in relation to the Bill or regulations. This extends to disclosures that are required to give effect to a specific provision of the Bill. [Subsection 70-35(2)]

Example 5.8

Simon, a Board member, notifies the Commissioner of the Board's decision to terminate the registration of a particular tax agent. This notification is made in accordance with paragraph 60-125(8)(c) of the Bill. It is not an offence for Simon to disclose this information to the Commissioner because Simon is merely ensuring that an obligation of the Board under the Bill is fulfilled and is therefore disclosing the information for the purposes of the Bill and in the performance of his duties under the Bill.

5.141 For a disclosure or record to be authorised it need not be referable to a specific provision of the Bill. The breadth of the phrase 'performance of duties' has been considered by the courts on a number of occasions including by the High Court (see Canadian Pacific Tobacco Co. Ltd. v Stapleton (1952) 86 CLR 1). A person's duties under or in relation to the Bill may include a range of functions that a person performs and that are not explicitly provided for in the Bill, for example, it may include an obligation that arises under another Act of the Commonwealth.

Example 5.9

The Commissioner issues an information-gathering notice to the Board under section 264 of the Income Tax Assessment Act 1936, requiring it to provide information held by the Board about a particular tax agent. It is not an offence for Marie, a Board member, to disclose this information to the Commissioner on behalf of the Board as she does so in the performance of her duties in relation to the Bill.

5.142 In recognition of the confidential nature of information obtained under a taxation law, such information cannot be compelled to be provided to a court or tribunal unless it is necessary for the purpose of carrying into effect the provisions of a taxation law. This reflects the significant loss of privacy that would result from the disclosure of this information in a public forum. Consistent with this, persons who are subject to the secrecy provisions of the Bill (as outlined in paragraph 5.136) cannot be compelled to provide information to a court or tribunal except where such a disclosure is required to give effect to the provisions of the Bill or regulations. [Subsection 70-35(3)]

5.143 In addition to being able to disclose information for the purposes of the Bill or regulations or in the performance of its duties under the Bill or regulations, the Board can disclose information that is relevant for law enforcement purposes. The Board's disclosures are linked to existing provisions in the TAA 1953 permitting the Commissioner to disclose information collected under a taxation law to certain agencies. Similar to the rationale for such disclosures by the Commissioner, this recognises that the public interest in the Board disclosing information to such agencies overrides the resulting erosion of a person's privacy. Specifically the Board will be able to disclose information to:

•

the Chief Executive Officer of the Australian Crime Commission for the purposes of a tax related investigation (section 3D of the TAA 1953); and

•

a law enforcement agency or a Royal Commission for the purpose of establishing whether a serious offence has been or is being committed or for the making or possible making of a proceeds of crime order (section 3E of the TAA 1953).

[Section 70-45]

5.144 A 'serious offence' is defined by section 3E to be an indictable offence. A 'law enforcement agency', defined in section 2 of the TAA 1953, includes state and territory police departments, the Australian Federal Police and other agencies such as the Australian Securities and Investments Commission that have law enforcement powers.

5.145 The on-disclosure of this information received by such entities is governed by the provisions of section 3D and 3E of the TAA 1953. In addition, given the significant consequences which may arise for an individual as a result of such disclosures, any disclosures that the Board makes to a law enforcement agency or to a Royal Commission must be reported by the Chair in the annual report on the operations of the Board - refer to paragraphs 5.123 to 5.125. Specifically, things mentioned in paragraphs 3B(1AA)(b) and (c) of the TAA 1953 must be set out in the annual report, to the extent that the Board discloses information under section 3E of the TAA 1953 during the year. (This is consistent with similar reporting requirements for the Commissioner.) [Subsection 60-130(2)]

5.146 In recognition of the law enforcement role that the Commissioner plays in relation to the taxation laws, the Board is also permitted to disclose information to the Commissioner for the purposes of establishing whether a taxation offence has been or is being committed or for the making or possible making of a proceeds of crime order in relation to a taxation law. The relevant definition of 'taxation offence' is that used in section 8A of the TAA 1953. [Subsections 70-40(1) and 90-1(1)]

5.147 A proceeds of crime order is an order that relates to a person's commission of a taxation offence that is made under the Proceeds of Crime Act 2002 (in particular, Chapter 2 or Division 1 of Part 3-1), the Proceeds of Crime Act 1987 (in particular, Part II or III), a law of a state or territory that corresponds to those Parts or Chapters of either of those Acts, or the Customs Act 1901 (in particular, Division 3 of Part XIII). [Subsection 90-1(1)]

5.148 The possible making of a proceeds of crime order in respect of a person includes making an order that is only a possibility at the time in question because the person has not been convicted (within the meaning of section 331 of the Proceeds of Crime Act 2002 ) of an offence to which the order relates. [Subsection 70-40(2)]

5.149 While no specific on-disclosure restrictions are placed on the Commissioner when he receives information from the Board, the Commissioner's use of the information is governed by existing taxation secrecy and disclosure provisions.

5.150 The fact that the ability to disclose information for law enforcement purposes is specifically entrusted to the Board (as outlined in paragraphs 5.143 and 5.148), as opposed to other persons, recognises the sensitivity associated with disclosing information for law enforcement purposes and the significant consequences that could result for an individual.

5.151 Although these law enforcement provisions permit the Board to make certain disclosures, the secrecy provisions prohibit a person from disclosing or recording information except in certain circumstances. However, as the Board may delegate its functions or powers, it may delegate its power to decide to disclose information and/or to make the disclosure of information to an individual (such as a specific Board member). Where an individual discloses protected information in accordance with such a delegation, they do not commit an offence as they are deemed to have disclosed information as the Board (see section 34AB of the Acts Interpretation Act 1901 ).

Example 5.10

The Board becomes aware that information that it possesses may be relevant to an Australian Federal Police investigation into allegations that Alex, a registered tax agent, obtained property by deception. Obtaining property by deception is punishable by imprisonment of up to 10 years, and is therefore an indictable offence. The Board decides to disclose this information to the Australian Federal Police. Natalie, a member of the Board, has been delegated the Board's power to disclosure information in such circumstances and discloses information in accordance with this delegation. Therefore, Natalie is considered to have exercised this power as the Board and therefore will be protected by the operation of section 3E of the TAA 1953.