Problem

One of the principles for the code of professional conduct for agents, states:

‘You must take reasonable care in ascertaining a client's state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement you are making or an activity you are undertaking on behalf of the client.'

1. what this means to you in terms of explaining the impact of taxation on the individual.?

2. Who is likely to be held responsible if a tax agent wilfully includes false information, of which the client has no knowledge, in a tax return?

3. An individual who is not an existing client approaches you in early November stating that their income tax return for the financial year has not been prepared or lodged.

The individual is aware that tax agents can lodge later than the October 31 deadline so requests that you prepare and lodge the tax return to avoid penalties. What advice do you give this individual?