The regulator stated that the Private Wealth Adviser Program has been established under the Tax Avoidance Taskforce and aims to help strengthen the integrity of the tax and super systems by recognising the important role advisers have in influencing the tax performance of privately owned and wealthy groups.

“The ATO considers that program will strengthen the integrity of the tax and super systems, by ensuring adviser accountability and compliance at the adviser level, which it hopes will result in greater compliance at the client level through the advisor’s influence,” Lowdon said.

“It also aims to detect and address advisors promoting unlawful tax schemes or high-risk positions.”

Lowdon continued that the focus on accountants and legal advisers is unsurprising as there is a long line of cases recording a surprising number of practitioners’ tardiness in lodging returns.

“Further, the ATO’s transitional period in its professional firm’s guidance in Practical Compliance Guideline PCG 2021/4 ended on 30 June 2024. However, this is far broader than that, both in terms of the issues the ATO will consider and the types of advisors who will fall within the scope of the program,” she said.

“The program isn’t solely focused on promoters or exploiters of tax avoidance schemes. While the ATO’s program will be a tailored, risk-based approach, it includes advisers who are accountants, legal advisors, financial advisers, insolvency practitioners, and all other advisers to private wealth clients including valuers, research and development consultants, and real estate agents.”

The regulator states on its website that the focus of this program is to:

• Ensure that professional firms and advisers are paying the right amount of tax in relation to their own affairs.
• Leverage the influence that advisers have on their clients' behaviour in our treatment strategies to get better compliance outcomes.
• Detect and escalate behaviours of advisers who are doing one or both of the following.
• Designing and promoting unlawful tax schemes to privately owned and wealthy groups.
• Influencing their clients to adopt high-risk or uncertain positions.

It adds that the ATO uses a range of data to identify risks, behaviours of concern, and common errors and that it will progressively share these insights with advisers and their clients to help them put corrective actions in place.

Lowdon said her understanding is that the ATO key areas of focus include, capital losses, dividend stripping (Taxpayer Alert TA 2023/1); Division 7A; omitted income and incorrect reporting; and non-compliance with PCG 2021/4 (allocation of professional firm profits).

“Those focus areas overlap, in many respects, with the ATO’s intended focus areas in the Private Wealth space for the 2025 year which also specifically mentions the Private Wealth Advisor Program,” Lowdon said.

“Private Wealth advisers should also be across to those key focus areas, which are varied and far-reaching, both for their own tax compliance but also for their clients more generally.”

Furthermore, Lowdon said, the program addresses a range of adviser behaviours, from innocent mistakes to more serious misconduct, such as misleading or obstructive conduct.

“The ATO will respond according to the behaviour identified. This will range from monitoring and intervention (where tax risks are present), to prompt action with immediate consequences or the application of promoter penalty laws where serious violations are identified,” she said.

“The advisers’ cooperation during reviews will also influence how the program responds. The ATO has indicated it will work closely with the Tax Practitioners Board in respect of any practitioners who are not meeting their tax obligations or driving non-compliance and will also make referrals to the TPB if the practitioner consistently causes delays during a review or fails to take reasonable care in ascertaining a client’s state of affairs.”