Compliance
Compliance Intensifies: Stronger Sanctions for Tax Advisors and Unregistered Preparers
Australia is tightening oversight of tax professionals. New laws introduce harsher penalties, including criminal sanctions for unregistered preparers. Here’s what advisory firms and small preparers need to know.
By NomadicTax Research Team • 5-8 min read • July 19, 2026
## What’s Changing in Tax Practitioner Regulation
On **2 July 2026**, the Australian government passed reforms under the *Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and other Measures) Bill 2026*. These changes bring in:
- **Criminal penalties** for **unregistered tax preparers**. If you're preparing tax advice without registration, this may now be a serious offence.([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- **New civil penalties** for breaches of the *Code of Professional Conduct*. Registered advisers will be under greater scrutiny.([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- **Doubling the maximum period** of registration termination for misconduct from current terms **up to 10 years**.([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- New powers for the **Tax Practitioners Board (TPB)**: to issue infringement notices, enter enforceable voluntary undertakings, and impose interim or contingent suspensions.([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
- Reforms also touch on **foreign resident CGT**, aligning it more closely with the OECD model, and enhancing competitive policy and charitable giving frameworks.([ministers.treasury.gov.au](https://ministers.treasury.gov.au/ministers/andrew-leigh-2025/media-releases/stronger-penalties-tax-misconduct?utm_source=openai))
## Who Needs to Pay Attention
| Group | Key Compliance Triggers |
|-------|--------------------------|
| Unregistered preparers | Operating without TPB registration now attracts real risk of criminal sanction. |
| Registered tax agents | Must follow stricter ethical codes; misconduct can lead to significant penalties. |
| Advisory firms | Increased exposure through audits or code breaches; internal compliance systems need to be tight. |
| Clients seeking CGT advice | Foreign resident CGT changes may affect property investors or overseas-resident beneficiaries. |
## Actionable Steps for Advisors and Preparers
- **Confirm registration**: Ensure you’re registered as a tax agent if you give tax advice or assist with lodgements. Unregistered provision is now hazardous.
- **Update Code compliance systems**: Training, internal auditing and ethics policies should be aligned with the new Code of Professional Conduct, with documentation and oversight.
- **Monitor registration status and renewing**: With termination periods increasing to 10 years, misconduct may have long-term career implications.
- **Review contracts and disclosures**: Clear client agreements, fee disclosures, and risks should be documented to reduce exposure.
- **Seek professional indemnity insurance**: Given rising stakes, PI insurance becomes more critical.
## Example Scenario
**Small firm “BrightTax Advice”** previously used an unregistered staff member to prepare clients’ simple returns. Under the new regime, that action could lead to criminal penalties for the individual or sanctions for the firm. Correcting this by ensuring registration of all those giving advice is essential.
**Amanda**, a registered tax agent, failed to breach ethics code by overstating deductions in clients’ preparer forms. Civil penalties now may apply, and registration risks revocation for up to 10 years under serious misconduct.
## What Clients Should Know
- **Always ask your adviser**: Are they registered with the TPB?
- **Get everything in writing**: Fee schedules, scope of services, disclaimers on advice especially for foreign scenario or CGT matters.
- **Report suspect advice**: If it seems unethical or incorrect, TPB has new powers to enforce.
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## Takeaway
For anyone giving tax advice or operating in professional services, it's no longer enough to *hope* you comply. You need robust systems, clear registration, and high standards. The law has ratcheted up accountability substantially.