Over the course of the last year, the Australian Taxation Office (ATO) has repeatedly indicated in various forums that advisors are in the ATO’s sights.

On 18 September 2024, the ATO updated its website regarding its “Private Wealth Advisor Program” (Program). The ATO considers that the Program, established under the Tax Avoidance Taskforce, will strengthen the integrity of the tax and super systems, by ensuring accountability and compliance at the advisor level, which it hopes will result in greater compliance at the client level through the advisor’s influence. It also aims to detect and address advisors promoting unlawful tax schemes or high-risk positions.

In some instances, the focus on accountants and legal advisors is unsurprising: there is a long line of cases recording a surprising number of practitioners’ tardiness in lodging returns. Further, the ATO’s transitional period in its professional firm’s guidance in Practical Compliance Guideline PCG 2021/4 ended on 30 June 2024. However, this is far broader than that, both in terms of the issues the ATO will consider and the types of advisors who will fall within the scope of the program.

Who’s on the list?

The Program isn’t solely focused on promoters or exploiters of tax avoidance schemes. While the ATO’s program will be a tailored, risk-based approach, it includes advisors who are accountants, legal advisors, financial advisors, insolvency practitioners, and all other advisors to private wealth clients (including valuers, research and development consultants, and real estate agents).

Issues on the list

We understand that the ATO's key focus areas include:

• capital losses;

• dividend stripping (Taxpayer Alert TA 2023/1);

• Division 7A;

• omitted income and incorrect reporting; and

• non-compliance with PCG 2021/4 (allocation of professional firm profits).

Those focus areas overlap, in many respects, with the ATO’s intended focus areas in the Private Wealth space for the 2025 year (as set out on the ATO website here), which also specifically mentions the Private Wealth Advisor Program. Private Wealth advisors should also be across to those key focus areas, which are varied and far-reaching, both for their own personal tax compliance but also for their clients more generally.

Sanctions and consequences

The Program addresses a range of advisor behaviours, from innocent mistakes to more serious misconduct, such as misleading or obstructive conduct. The ATO will respond according to the behaviour identified. This will range from monitoring and intervention (where tax risks are present), to prompt action with immediate consequences or the application of promoter penalty laws where serious violations are identified. The advisors’ cooperation during reviews will also influence how the Program responds.

The Program and TPB

While the Program is not focused solely on accountants, the ATO has indicated that it will work closely with the Tax Practitioners Board (TPB) in respect of any practitioners that are not meeting their own tax obligations or driving non-compliance. The ATO will also make referrals to the TPB if the practitioner consistently causes delays during a review or fails to take reasonable care in ascertaining a client’s state of affairs.

Sladen Legal’s tax team has extensive experience in helping advisors as part of ATO reviews. For more information please contact:

Daniel Smedley
Principal | Accredited Specialist in Tax Law
M +61 411 319 327 |  T +61 3 9611 0105
E: dsmedley@sladen.com.au

Neil Brydges
Principal | Accredited Specialist in Tax Law
M +61 407 821 157 | T +61 3 9611 0176
E: nbrydges@sladen.com.au

Kaitilin Lowdon
Principal Lawyer
M +61 402 859 214 | T+61 3 9611 0120
E: klowdon@sladen.com.au

Rob Warnock
Principal Lawyer
T +61 3 9611 0155 | M +61 419 892 115
E: rwarnock@sladen.com.au

Edward Hennebry
Senior Associate
T +61 3 9611 0113 | M +61 428 439 730
E ehennebry@sladen.com.au