False or misleading statements: TPB obligations for tax practitioners

Published 27 August 2026. Last reviewed 27 August 2026. Technically reviewed by the Taxpartna tax team.

Equally, a technically correct workpaper can create risk if its final amount never flows through to the return that is actually lodged.

The practitioner therefore needs to consider not only whether a calculation exists, but whether the final statement being made tells the correct material story.

This article provides a practical overview of section 15 of the Tax Agent Services (Code of Professional Conduct) Determination 2024. It is general information only and practitioners should read the current TPB guidance directly.

What is the TPB false or misleading statement obligation?

Section 15 of the Determination addresses statements to the Tax Practitioners Board, Australian Taxation Office and other Australian government agencies.

The current TPB guidance explains that a registered tax practitioner must not make or prepare - or permit or direct another person to make or prepare - a relevant statement where the practitioner knows or ought reasonably to know that the statement:

• is false or misleading in a material particular, or
• omits something without which the statement is misleading in a material respect

The section 15 transitional periods have now passed, meaning the requirements apply to registered tax practitioners generally.

There are also separate rules dealing with action that may be required after a materially false or misleading statement has already been made to the TPB or ATO.

Those later-action requirements have specific thresholds and should not be reduced to a generic rule that every error must automatically be reported.

What is a "statement"?

For these purposes, the concept of a statement is broad. It can include information provided:

• in an income tax return
• in an activity statement
• in an amendment
• in correspondence
• in an application
• electronically
• orally
• through other communications with relevant government agencies

A return can contain many individual statements.

This matters for tax-review purposes because an inconsistency at one label may itself be significant even where the overall return looks complete.

What can make a statement false or misleading?

A statement may be false because it is contrary to fact.

It may be misleading because it creates an incorrect impression.

The problem can arise from what is included or, in appropriate circumstances, what is omitted.

Practical tax-file examples could include:

• assessable income omitted from the return despite appearing in the final workpapers
• a deduction remaining in the return after the supporting workpaper has been changed
• a company return disclosing a related-party loan amount inconsistent with the final accounts
• a trust return based on an earlier distribution schedule rather than the final resolution
• a statement based on client information that later material review evidence calls into question
• a tax label populated from an outdated version of a workpaper

These examples illustrate review risks. Whether a particular statement is materially false or misleading is a legal and professional question determined from the circumstances.

What does "material" mean?

Section 15 is concerned with false or misleading matters of significance rather than trivial or inconsequential errors.

Materiality depends on the facts and circumstances.

A review process should therefore avoid two extremes:

Extreme one: treating every typographical issue as though it creates the same risk as a material tax understatement.

Extreme two: ignoring an inconsistency simply because the overall tax result does not initially appear large.

The registered practitioner needs to apply professional judgement.

What does "ought reasonably to know" mean?

The TPB's guidance distinguishes actual knowledge from constructive knowledge.

In practical terms, a practitioner cannot necessarily avoid an issue merely because they did not actually notice it if a reasonable and honest tax practitioner in the same circumstances ought to have identified it.

That does not create an obligation to detect every possible error in every file. But it reinforces the importance of processes proportionate to:

• the complexity of the matter
• the size and significance of the amounts
• the reliability of information
• the practitioner's knowledge of the client
• the risks apparent from the file

It also connects closely with the existing reasonable-care and competency obligations.

What if the client supplied the wrong information?

Client-supplied information is not automatically beyond review.

The registered practitioner is not expected to independently prove every fact supplied by every client.

However, where information in the file creates reason to question a client statement, the issue may need to be investigated. Consider:

• the client says there are no shareholder loans
• the balance sheet contains a substantial director loan account
• the general ledger contains movements through that account
• no supporting workpaper exists

A review process should not simply ignore the contradiction because the original client questionnaire said "no".

A reasonable process may include asking the client or preparer for clarification and retaining appropriate evidence of the response.

The importance of cross-document review

Many potential false or misleading statement issues are not found by reading a single document.

They emerge because two documents tell different stories. For example:

The reviewer does not yet know which amount is correct. But the inconsistency is enough to justify investigation.

A structured review should help answer:

1. 1What is the final balance?
2. 2Which document is outdated?
3. 3What supporting evidence exists?
4. 4Does the return require amendment before lodgement?
5. 5Are other affected workpapers consistent with the correction?

The professional conclusion remains with the practitioner.

What should happen when an inconsistency is found before lodgement?

A practical review process is:

1. Identify the inconsistency

Be precise about the value, the document and the relevant label or workpaper.

2. Trace the source

Determine whether there is a more authoritative or final record.

3. Raise the question

Ask the preparer or client where necessary.

4. Obtain evidence

This might include:

• updated ledger
• agreement
• transaction history
• client confirmation
• corrected workpaper
• other supporting document

5. Determine the treatment

The registered tax practitioner determines the appropriate tax treatment.

6. Correct affected documents

Ensure the final decision flows through the relevant workpapers and return.

7. Document the resolution

Leave enough information in the file to understand what was found and how it was resolved.

8. Sign off only when ready

A flagged matter is not resolved merely because it has been identified.

What if the statement has already been made?

Section 15 contains specific requirements that may apply after a statement has already been given to the TPB or ATO. The detailed rules depend on matters including:

• who made or prepared the statement
• whether it was materially false or misleading at the time
• the practitioner's grounds for that belief
• whether the issue arose through a failure to take reasonable care, recklessness or intentional disregard
• whether the statement related to a client
• how the client responds
• whether specified additional conditions arise

Depending on those circumstances, the rules can involve steps such as:

• having a statement corrected
• advising a client that it should be corrected and explaining possible consequences
• withdrawing from an engagement in specified circumstances
• notifying the TPB or ATO in specified circumstances
• considering further action in the public interest

Do not treat that list as a universal sequence applying to every mistake.

Practitioners dealing with an already-lodged materially incorrect statement should read TPB(GS) 50/2024 carefully and consider professional or legal advice where appropriate.

Document what happened

Where a significant review issue is identified, useful file evidence may record:

• the original inconsistency
• when it was identified
• documents involved
• question raised
• client's or preparer's response
• further evidence received
• correction made
• professional conclusion
• any follow-up required

That is valuable for current review and future continuity. See the tax review file note checklist.

Pre-sign-off questions for the reviewer

Before lodging a significant return or statement, consider:

• Do the final tax workpapers agree with the return?
• Does accounting profit agree to the starting point of the tax reconciliation?
• Does taxable income agree across the final calculation and return?
• Are material deductions supported?
• Are material income items accounted for?
• Are final trust or dividend amounts reflected consistently?
• Are related-party balances consistently disclosed?
• Are material prior-year carry-forwards supported?
• Have unusual movements been investigated where appropriate?
• Have contradictory client statements been resolved?
• Are significant unresolved review points still open?
• Does the practitioner understand the basis for the material positions being signed off?

A checklist is not a substitute for professional judgement. Its purpose is to reduce the chance that significant inconsistencies are overlooked in the review process.

Where Taxpartna fits

Taxpartna assists the review of a completed tax file.

It compares values across submitted workpapers, financial statements, returns and supporting documents and can identify where information:

• agrees
• appears in only one source
• cannot be located
• differs between sources

That can give the firm's reviewer a more targeted starting point for investigation.

Taxpartna does not decide whether a statement is legally false or misleading. It does not determine materiality and does not replace the registered practitioner's obligations under section 15.

The practitioner remains responsible for investigating the issue, determining the appropriate tax treatment and deciding whether the file is ready for sign-off.

Related resources

• Reasonable care: a moving standard
• Tax return review checklist
• Tax quality assurance sign-off
• Tax agent record-keeping requirements
• Tax review file note checklist
• TPB quality management system for tax agents

Primary sources

• Tax Practitioners Board - TPB(GS) 50/2024, False or misleading statements
• Federal Register of Legislation - Tax Agent Services (Code of Professional Conduct) Determination 2024
• Federal Register of Legislation - Tax Agent Services Act 2009

Important information. This article is general information only and is intended to support professional review. It does not replace section 15 of the Determination, current TPB guidance or the registered tax practitioner's judgement. Taxpartna is a quality assurance assistance platform and does not provide tax advice, prepare returns or give final sign-off.