The tax agent's role

List of tax agents

Introduction

We recognise the important role tax agents play in the New Zealand tax system helping taxpayers to understand and meet their obligations and modelling exemplary compliance behaviours.

The law helps tax agents to do this by formalising the relationship between tax agents and us. That relationship is a partnership and it is important that it is based on open, honest communications and shared high standards. This ensures that taxpayers, as customers of both tax agents and Inland Revenue, can be confident their interests are protected and legal obligations are properly met.

Inland Revenue has a legal obligation to maintain the integrity of the tax system. To do this, it is vital that we support tax agents in maintaining the level of service delivery to uphold public confidence in both tax agents and the tax system.

Since 19 December 2007 the law requires us to maintain a list of tax agents. It also prescribes criteria for adding tax agents and maintaining that list.

Who can be a tax agent?

A person is eligible to be a tax agent if the person prepares returns of income required to be completed and sent in for 10 or more taxpayers, and is one of the following:

• a practitioner carrying on a professional public practice, or
• a person carrying on a business or occupation in which annual returns of income are prepared, or
• the Maori Trustee.

Maintaining the list of tax agents

We have determined that the management of the list of tax agents will rest with the Customer Insight/Large Enterprises business areas.

Customer Insight/Large Enterprises has as a business focus, the management of relationships with our customers including tax agents. Agent account managers/account managers, as part of Customer Insight/Large Enterprises, will:

• process applications
• update the list with new tax agents
• update changes to the list
• consider the appropriateness of listing tax agents, and
• remove names from the list when they cease to be tax agents.

The list of tax agents will not be published.

Application process for new tax agents

Eligible persons wishing to become a tax agent will need to complete an Application to be a tax agent, update your details or cease to be a tax agent (IR 791) form. Go to "Forms and guides". There are detailed guide notes on the form about the information required.

Applicants will need completed authority forms - Client linking or delinking (IR 795) for each client and include these with their application. Go to "Forms and guides".

All applications we receive will be reviewed and, if appropriate, an applicant will be listed as a tax agent.

As we have an obligation to maintain the integrity of the tax system the law requires us to refuse to list a person as an agent or to remove them from the list of agents if there is reason to believe that keeping them listed would compromise the integrity of the tax system. For more information on the criteria and how they will be applied - see below.

Approved applicants will receive notice they have been accepted as a tax agent and relevant information on the assistance we are able to provide.

"Key officeholder" details we need

To properly maintain the list of tax agents we have an obligation to have details of the individual person(s) or entities who have significant authority or responsibility for either the preparation and filing of returns or for the management of the business in which people are employed to file returns.

Where a natural person is to be a tax agent, we need the details of that person. In cases where the tax agent is an entity we require the details of people referred to as key officeholders.

The law defines the key officeholders for which details need to be provided to us as:

• each person having the duties of tax manager, chief financial officer, chief executive officer or director, if the entity is a body corporate other than a closely held company
• each shareholder of the entity, if the entity is a closely held company
• each partner in the entity, if the entity is a partnership
• each member of the entity, if the entity is an unincorporated body.

Changes in the details of key officeholders must be given to us within twelve months of the change. This ensures the list we hold of tax agents is up to date.

Transition to new list of tax agents

Since 19 December 2007 all tax agents already recorded with us, will be transitioned onto the new list. If an existing tax agent is an entity, they must provide details of key officeholders, within twelve months.

Declining an application or withdrawal from the list of tax agents

Occasionally we may have concerns about a particular applicant or existing tax agent's (or key officeholder's) suitability as a tax agent.

Circumstances where it may not be appropriate for a person to be a tax agent may include, where the person:

• has been notified of an offence or breach by the disciplinary body of a professional organisation, of which they are a member
• is an undischarged bankrupt or an insolvent entity
• is an individual or a body corporate that has been convicted of a crime involving dishonesty (within the meaning of s2(1) of the Crimes Act 1961)
• is an individual who is prohibited from being a director or promoter of, or taken part in the management of a company under section 382, 383 or 385 of the Companies Act 1993
• is a person who has been convicted of an offence under the Tax Administration Act 1994
• is a tax agent who has a poor compliance history in respect of their personal tax affairs or as a tax agent of taxpayers, or
• has personal circumstances which would make being a tax agent inappropriate.

This list is not exhaustive.

Ongoing monitoring of tax agents will be undertaken by agent account managers/account managers in the usual course of their work.

Process for consideration of declining approval or withdrawal

Any concerns about tax agents will generally become available to us as result of normal business processes carried out by staff. If an issue is identified that requires further investigation the following process will be used to determine the next steps:

1. Inland Revenue staff member becomes aware of information which gives cause for concern about a person's suitability as a tax agent.
2. The staff member will discuss the matter with their team leader or manager.
3. Information will be referred to Customer Insight/Large Enterprises after consideration by the local team leader or manager.
4. Customer Insight/Large Enterprises will consider whether a formal review should commence.
5. If it is decided to proceed, relevant information will be assembled and facts documented.
6. A formal notice will be issued to an applicant or tax agent by a Customer Insight/Large Enterprises Manager after taking technical or legal advice, where appropriate. Where the person is a key officeholder within an entity (eg a partner within a partnership) the entity will be contacted in the first instance. This notice may include an offer of an interview.
7. The interview with Inland Revenue is not a formal hearing. It is an opportunity to openly discuss the concerns and identify acceptable resolution of the concerns where possible. The person will be invited to be represented by professional bodies they may be associated with, or other representatives.
8. When appropriate, written advice of a decision to decline or withdraw a person from the list of tax agents, information about the decision or would be relevant to such a decision, may be issued to a relevant professional organisation of which the person is a member. Any decision to provide information will be made by a group manager or deputy commissioner.
9. A written record of the interview will be made.
10. After an interview has been held and/or written submissions have been received, all relevant facts will be presented in a formal report with recommendations for the next steps. This will be reviewed by one of the Customer Insight/Large Enterprises Managers.
11. Any decision to decline, withdraw or disclose will be made by a group manager or deputy commissioner and will be conveyed to the person in writing. The effective date of withdrawal from the list of tax agents will be the date of written notification.
12. In the case of withdrawal of a person's name from the list of tax agents, the person's clients will be contacted. Any current extension of time to furnish returns for affected clients will be preserved in respect of those returns.

At all times there is an emphasis on the resolution of concerns if at all possible. The process outlined above can be halted at any point where a resolution acceptable to all parties can be found, provided it maintains the integrity of the tax system.

It is expected that the number of instances that will result in either an application being declined or an entity being removed from the list of tax agents will be low.

Other pages in: The tax agent's role

• Common questions about the role and functions of tax agents
• How to apply to be a tax agent
• Who is a tax agent?

Date published: 09 Apr 2008

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