Changing Times Changing Taxes Changing Ethical Perspectives: Defining the Limits of the Ethical Obligations of Australian Tax Practitioners

Abstract

The content of the ethical obligations attached to tax advice (“tax ethics”) may be in the process of undergoing a quantum change from that dominated by the interests of clients to reflecting a balancing with broader interests. It will be demonstrated that there is significant support for this change and, indeed, that there are numerous reasons why the profession should embrace a wider ethic in the provision of advice. From one perspective this debate as to the ethical approach that should be adopted by tax practitioners may only be part of a subterfuge adopted by the opposing parties in the tax collection arena. If one accepts the rule of law thesis that law is determinable then any discretionary scope for tax practitioners is largely diminished with an attendant decline in the significance of tax ethics.By contrast an interminable law thesis gives centre stage to the tax ethics debate. If, as is suggested, the impetus is away from a client centred ethos towards tax practitioners adopting a moral position them this presents numerous issues that need to be addressed. Firstly, what is meant by embracing a moral position and, in particular, what moral foundation is advice to be tested against? Secondly, how is the moral practitioner to guard against confusing motivations with after-the-fact justifications? Thirdly, inherent in the proposition that it is in the interests of society that taxpayers comply with the spirit of the law is the assumption that the law has been fashioned in the public interest. The Parliamentary process can be demonstrated to be a flawed and parochial process. Where does this leave the tax practitioner who is not satisfied that the spirit (or even meaning) of the law is in the public interest?This leads on to a fourth consideration. What is the role of the tax practitioner where they are of the opinion that the government will not spend all or part of the tax revenue in the public interest? Is tax advice that furthers a program of civil disobedience justified or even mandated?Finally, what are the ethical obligations of the tax administrator? If the taxpayer's advisers are required to frame their advice in the public interest then does a similar obligation rest on tax administrators and, if so, what are the implications for tax collection?