Tax Agents:

Tax agents are professionals who deal with highly sensitive information. They provide accounting services to people and businesses which place a great deal of reliance on the skills and expertise of the tax agent. Traditionally, accounting professionals are thought of on the same level as lawyers and doctors. The duty of care that is owed to the tax agent’s client and the general public at large, is therefore of the highest standard.

Some of the more common cases that a tax agent may face in the event of a dispute of complain against him by a client involve:

• Disputes concerning the retainer, its scope and parameters, the express and implied duties that may create a liability for the tax agent or impose responsibilities on him;
• Contractual terms, both express and implied, from which disputes may arise and complaints made for an unsatisfactory discharge of duties or substandard work;
• Negligence tax returns, where a return is filed which results in some loss or damage being suffered by the client as a result of the tax agent’s poor performance;
• Failure to advice and failure to warn, where the tax agent may have a duty to provide some information, guidance and advice to the client in relation to the practice of accounting, and where this failure leads to loss of damage or some additional liability on part of the client;
• Actions taken beyond the instruction of the client, where the tax agent does something without the authority or instruction of the client (issues of ostensible, implied authority and penumbrate duties may become relevant here).
• The negligent provision of legal advice, where a tax agent purports to provide legal advice without the necessary qualifications and accreditation. This can lead to serious legal problems for the client who otherwise relied on the tax agent’s professional guidance;
• Negligent financial advice, under similar circumstances to the above, where the tax agent provides advice which is false, misleading, confusing, outdated, or otherwise leads the client into error and through which he suffers loss and damage; and
• Negligent credit advice, where advice is provided to the client about taking or dealing with credit, where that advice is woefully poor and inappropriate, and which leads to the undue assumption of credit liabilities by the client.

Other causes of action can be grounded against a tax agent. Generally, allegations of professional negligence against a tax agent are made as a result of loss and damage suffered by a former client who wishes to recuperate that quantum of loss. However such claim against a tax agent for professional negligence are difficult to establish. Nevertheless, like all claims in negligence, should there be sufficient evidence to establish that an industry accepted standard of care has been breached by the tax agent, a claim can be prepared and pursued.

If a tax agent is being sued by a former client, a tax lawyer should be contacted immediately so that no time is wasted gathering the necessary evidence and forming a defence against the allegation. It should also be remembered that ill-conceived allegations can themselves be a cause to prosecute the accuser for defamation because such allegations may likely have a serious and deleterious impact on the reputation, and therefore the business, of the tax agent. Moreover, insurance cover for tax agents will almost certainly contain an exclusion clause which seeks to avoid payment on a policy in the event that the insured party has been found to fall within one of the exclusion categories, negligent conduct often being one such category.

Alternatively, if somebody believes that their tax agent did not perform their duties to an acceptable level, and if some loss or damage has been suffered by that individual as a result, a tax solicitor should be contacted to investigate the particulars of the potential claim before taking any steps to lodge a complaint or file a suit in Court. Suing a tax agent can be a complex and time consuming process. Any serious case should not be delayed. Obtaining legal advice from a solicitor or lawyer who deals with tax disputes can be a quick basis on which to form a view whether or not to pursue a claim.

If you need guidance with tax agent negligence litigation, you may wish to contact our firm by telephone on (02) 9233 4048 or email us at info@navado.com.au and make an appointment to see one of our solicitors.

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.