If you are a tax agent or intermediary, you play an important role in administering the tax system.
Our relationship with you is very important. The advice and assistance you give your clients will significantly influence their tax compliance.
Because of this we, and the New Zealand public, trust you to uphold the integrity of the tax system.
As an approved tax agent, you are expected to deal with our staff in a respectful and professional manner. If you do not, we may take that into consideration in determining whether you pose a risk to the integrity of the tax system.
Declining a tax agent application or removing an existing agent from the tax agent list
We may decline an application from someone wanting to be a tax agent, or remove an existing agent from the tax agent list if we think that person poses a risk to the integrity of the tax system. This includes the listed tax agent or key office holder.
Some of the issues we may consider include (but are not limited to):
- criminal offending
- dishonest behaviour
- failure to comply with personal tax obligations
- breaching client confidentiality
- serious or repeated performance issues.
We will work with you to sort out any issues affecting your ability to be a tax agent, but we can decide to refuse registration or remove your agent status if we consider you pose a risk. Any steps we take will follow the Tax Administration Act 1994.
Examples of issues we may consider
Mikaere has been a tax agent for 15 years and has always provided an excellent service to her clients.
After breaking up with her partner, and as part of the division of relationship property, she bought her ex-partner’s share in their family home. This has placed tremendous financial pressure on her. Mikaere has an overdue income tax debt.
At a recent catch-up, her account manager asked about the debt. Mikaere explains her circumstances and that she cannot pay the debt immediately but understands the importance of meeting her tax obligations, especially as a tax agent.
Mikaere applies for an instalment arrangement to pay the debt off over time. She follows the instalment arrangement, and it is expected that the debt will be paid off within the agreed timeframe.
We take any risk to the integrity of the tax system seriously.
The non-payment of tax by tax agents themselves is a risk. However, we do not consider that she poses enough of a risk to justify removing her as an agent. This is because Mikaere has taken steps to pay off her debt, including meeting the instalment arrangement.
John applies to be a tax agent after resigning from his role in an accounting firm 6 months ago. We find out that he is being investigated for dishonest behaviour in this role. The police have received a complaint that John misdirected clients’ tax refunds into his personal bank account.
John is later prosecuted and found guilty.
We take criminal offending very seriously.
We tell John that we intend to decline him as a tax agent and that he has 30 days to provide further information before we finalise our decision. He does not respond, so we decline his request to be an agent.
Jo has been a registered tax agent for 3 years. As part of our regular review, we asked Jo to provide the Authority to act documents for a random sample of clients. He did not reply or provide the documents within the specified time frame.
In response, we removed his access to those clients and requested information about another sample of clients. Jo again failed to respond to that request and again we removed his access to those clients.
We then fully reviewed Jo’s practice for compliance. This revealed significant integrity issues. Jo had been sharing his myIR logon details with an intern he had been supporting, which is against the myIR terms and conditions.
We took immediate steps to remove the logon.
Jo also had been adding his own bank account to his clients’ profiles instead of using the refund redirect function. Jo had been a member of a professional body but had recently been disqualified. When asked to explain the above issues, Jo refused.
We take any risk to the integrity of the tax system seriously.
We view Jo’s non-compliance and any breaches very seriously. As Jo is a registered tax agent with us he is seen as a trusted advisor. We tell Jo that we intend to remove his agency and that he will receive a letter giving him the opportunity to respond within 30 days. He does not respond and as a result his agency is removed.
Approved advisor groups
Approved advisor groups give tax advice and follow a certain code of conduct. We approve these groups if they meet the requirements under section 20B(5) of the Tax Administration Act 1994.
Organisations with approved advisor group status:
- The New Zealand Institute of Chartered Accountants
- Accountants and Tax Agents Institute of New Zealand
- CPA Australia
- Chartered Accountants Australia and New Zealand
- Institute of Certified NZ Bookkeepers
- New Zealand Qualified Bookkeepers Association.
Tax advisors in approved advisor groups can claim the right of non-disclosure on behalf of a taxpayer.