Tax consultant personal liability
I am an auditor and tax consultant and have read some new rules that a tax consultant is an agent of the taxpayer? What are the consequences as a normal principal agency relationship has serious liabilities for the agent?
It is true that recently the Tax Administration (General) (Amendment) Regulations, 2022 amended the Tax Administration (General) Regulations 2016 (Regulations) which now provide an agency relationship between the taxpayer and the tax consultant, whether or not such a relationship is formalized.
These regulations leave room for a wide interpretation and are certainly very concerning for tax consultants as there is always a chance that the agent (tax consultant) could be held personally liable for the taxpayers’ affairs. Your line of reasoning is very valid and you or your professional body can take this up with the Ministry of Finance and the TRA as there is potentially serious exposure for tax consultants. Such a passed over liability is equal to a criminal defence lawyer being held liable for the deeds of her/his client.