Highlights

  • Five new criminal offences target unregistered preparers, with maximums of 40 months' imprisonment, 200 penalty units, or both.
  • Maximum civil penalties jump from 250 to 2,500 units for individuals and from 1,250 to 50,000 for bodies corporate.
  • Deregistered practitioners face a reapplication ban of up to 10 years, double the previous five.
  • The ATO has stopped more than 10,000 returns linked to suspected unregistered preparers, which claimed about $170 million in deductions.

Under the previous law, a deregistered tax practitioner waited five years to reapply, and an individual's maximum civil penalty sat at 250 penalty units. Now the wait stretches to 10 years, the ceiling reaches 2,500 units, and people who prepare returns for a fee without registration can face up to 40 months in jail. With about 2 million self-preparers yet to lodge as of 19 October, who handles a return matters more than ever.

What Parliament has passed

The Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Bill 2026 had passed both the House of Representatives and the Senate by 10 September 2026, and was then awaiting royal assent. Whether assent has since been given, and when each provision starts, is not confirmed.

The bill gives the Tax Practitioners Board (TPB) regulatory penalty powers by amending the Tax Agent Services Act 2009. The reforms follow a consultation paper on the TPB's sanctions regime released in December 2023, after the PwC tax leaks scandal, and were announced in the 2025–26 federal Budget.

Five new offences, up to 40 months' jail

The bill creates five criminal offences aimed at unregistered preparers. They cover people who provide tax agent or business activity statement (BAS) services for a fee, advertise those services, or falsely represent themselves as a registered tax or BAS agent. The maximum penalty is 40 months' imprisonment, 200 penalty units, or both.

Civil penalties rise sharply

For individuals, the maximum civil penalty rises tenfold. For bodies corporate and significant global entities, it rises forty-fold. The higher maximums apply to all civil penalty provisions, including the new ones. The government said the increases provide an "appropriate and strengthened deterrent for unethical behaviour".

If the TPB terminates a practitioner's registration, it can bar them from reapplying for up to 10 years. Labor Senator Deborah O'Neill said the longer ban was "to make sure that there's actually a disincentive for people to do the wrong thing once caught". Greens Senator Barbara Pocock called the measures "modest in their scope".

Why it matters for taxpayers

The ATO warns that clients of unregistered preparers lose safe harbour protection. Safe harbour can protect a taxpayer from certain penalties for false or misleading statements when a registered agent was used and given all the relevant information.

TPB Chair Peter de Cure AM said: "Unregistered preparers can expose taxpayers to significant risks and undermine the integrity of the tax system." Anyone paying for tax help can check a preparer's status on the TPB's public register.

Consider a hypothetical taxpayer, Mia, in the 30% bracket for 2026–27, who pays an unregistered preparer promising a bigger refund. The preparer adds $3,000 of unsubstantiated work deductions. With the 2% Medicare levy on top of her 30% rate, they lift her refund by $960. If the ATO disallows them, she would generally repay the $960, possibly with interest and penalties, and could not rely on safe harbour.

What to watch

How widely the TPB uses its new powers will depend on its enforcement priorities and resources. The Federal Register of Legislation and the TPB are the places to look for the final Act.

Registered tax professionals must add new clients to their lists by Saturday 31 October 2026. Self-preparers must lodge by Monday 2 November, with payment generally due on 21 November. A Treasury consultation on new ATO and TPB powers against intermediary fraud is open until 20 November 2026.