Topic: TPB’s 2026 focus: key compliance areas for tax practitioners to watch

Last reviewed: 17/12/2025

Focus: Accounting Practice Analysis

TPB 2026 Focus: Key Compliance Areas to Watch

TPB’s 2026 compliance focus for Australian tax practitioners is expected to tighten around verifiable client identity and authority, higher-quality tax agent services (especially advice positioning and substantiation), stronger governance over lodgments (including BAS and high-risk claims), and demonstrable compliance with the Code of Professional Conduct—because these are the practical pressure points where ATO data-matching, fraud controls, and community expectations now intersect. For practices, the 2025–26 year is the time to harden onboarding, evidence files, escalation protocols, and documentation quality so TPB reviews (including targeted audits and investigations) can be answered with contemporaneous proof rather than after-the-fact reconstruction.

Featured Answer: TPB’s 2026 focus for tax practitioners is best managed by strengthening four areas: (1) Code of Professional Conduct evidence (reasonable care, competence, confidentiality, independence and integrity), (2) identity/authority controls to prevent fraud and unauthorised lodgments, (3) substantiation and documentation standards for high-risk claims and advice work, and (4) governance over lodgments, record-keeping and supervision of staff. Practices that implement auditable workflows—especially for onboarding, ATO portal interactions, BAS/ITR substantiation and review sign-offs—will be best positioned to withstand TPB scrutiny.

What is the TPB likely to prioritise in 2026 (and why now)?

TPB’s practical priority is protecting the integrity of the tax system by enforcing the Code of Professional Conduct and ensuring tax practitioner services meet professional standards, particularly where fraud, poor governance, or systemic errors are observed. This direction aligns with broader ATO compliance trends including increased data-matching, scrutiny of high-risk claims, and tighter controls in the ATO online environment.

Rising identity crime and refund fraud attempts targeting practitioner access channels.
Increased ATO reliance on third-party data and pre-fill, making anomalies easier to detect.
Community expectations of stronger practitioner accountability where negligence or misconduct is alleged.
Greater attention on “systemic issues” inside practices (supervision, checklists, QA, training and evidence).

Tax Agent Services Act 2009 (TASA 2009): establishes registration and the Code of Professional Conduct.
TPB Code of Professional Conduct guidance and TPB information sheets (practice governance expectations are repeatedly emphasised in TPB communications).
ATO substantiation and record-keeping guidance for deductions and claims (including work-related expenses, business deductions, and logbook/diary expectations).
Privacy Act 1988 and confidentiality obligations where client data handling is in scope (even though TPB is not the privacy regulator, Code confidentiality expectations and practice risk overlap).

Which Code of Professional Conduct obligations will be most tested in 2026?

The TPB will test whether your practice can prove—using documents and workflow artifacts—that it consistently meets Code obligations under TASA 2009. In TPB matters, assertions carry little weight without contemporaneous evidence.

Reasonable care and competence
Honesty and integrity
Independence and conflicts
Confidentiality

A staff member finalises an ITR with large work-related expense claims based on “client says so”, no diary/logbook, no file note, no review sign-off. Even if the ATO later amends, TPB scrutiny often focuses on whether reasonable care and competence were exercised at the time.

How will identity, authority and fraud controls become a bigger TPB issue in 2026?

Identity and authority controls are expected to be a major TPB pressure point because practitioner channels can be exploited for fraud if onboarding and authorisation steps are weak. Even where the practice is a victim, TPB can still examine governance: were controls reasonable and consistently applied?

Client identity verification is documented
Authority to act is provable
ATO portal access and credential hygiene is controlled

A “new client” emails asking for urgent amendment and refund reroute. If you act without robust verification and authority checks, both the ATO and TPB will expect you to explain the controls you applied and why they were sufficient.

What lodgment and reporting behaviours will the TPB scrutinise most?

TPB scrutiny commonly intensifies when there is a pattern: repeated late lodgments, repeated amended returns due to avoidable errors, or evidence of “reckless” positions taken across a client base. In 2026, practices should assume TPB will focus on demonstrable governance over lodgments—not just whether returns were lodged.

Systemic late lodgments without documented mitigation plans.
High amendment rates due to weak source document collection or poor review controls.
“Agent-as-lodgment-factory” patterns, where complex matters are handled without escalation.
BAS and GST governance gaps

ATO guidance on record keeping and substantiation (the ATO’s expectations around evidence directly impact what “reasonable care” looks like).
ATO BAS and GST guidance, including how to correctly report GST and adjustments and retain supporting records.

A documented lodgment workflow with:

Which technical areas create the highest TPB exposure when advice quality is weak?

TPB action is often triggered less by the technical topic itself and more by poor process: unsupported positions, inadequate disclosure, or failure to advise of risks. That said, certain areas repeatedly generate practitioner risk because they are complex and commonly mishandled.

Work-related expenses and substantiation-heavy deductions
Division 7A (private company loans to shareholders/associates)
Trust distributions and beneficiary reporting
GST classification and adjustments
PAYG withholding, STP alignment, and contractor/employee characterisation

Where positions are not straightforward, the file should reflect that appropriate research was performed, risks were explained, and client instructions were documented.

What documentation will “win” a TPB review in 2026?

In a TPB review, the file is the story. If it is not written down, it is assumed not done.

Engagement letter and scope definition (including what is excluded).
Authority to act and identity verification records.
Source documents and substantiation pack (invoices, receipts, logbooks, reconciliations).
Advice basis and reasoning
Review and supervision evidence
Communication records
Secure storage and access controls evidence

For a motor vehicle claim, retain: logbook, odometer evidence, calculation workpaper, and a note explaining why the method chosen is appropriate given the client’s use pattern.

How should practices adjust governance, training and supervision for 2026?

Practices should treat TPB compliance as a management system, not a technical memo. TPB outcomes often turn on whether the practice can demonstrate active supervision, consistent procedures, and quality assurance.

Partner-level risk framework
Standardised workpapers
Training with testing
Quality assurance sampling
Incident response playbook

How does MyLedger help reduce TPB compliance risk compared with Xero, MYOB and QuickBooks?

MyLedger reduces TPB-facing risk primarily by improving evidentiary quality, reconciliation speed, and consistency of working papers—areas that commonly fail under TPB scrutiny—while also reducing manual handling where errors and omissions occur.

Reconciliation speed and consistency
Automation and audit trail readiness
Working papers and compliance documentation
ATO integration

The TPB does not “audit your software”, but it does assess whether you acted competently and kept appropriate records. Systems that standardise reconciliation, evidence capture and working papers materially improve the practice’s ability to respond to TPB enquiries with proof.

What is a practical 90-day action plan to prepare for TPB’s 2026 focus?

A 90-day plan should prioritise controls that create evidence and reduce errors quickly.

Standardise onboarding and authority controls

Tighten substantiation and file-note discipline

Implement review and supervision artefacts

Improve reconciliation and BAS governance

Run fraud and ethics scenario training

Next Steps: How Fedix can help your practice get TPB-ready

Fedix, through MyLedger, is designed to help Australian accounting practices operationalise compliance by turning bank statements into financial statements in minutes and producing consistent working-paper outputs suitable for review and governance. If your 2026 priority is to reduce TPB risk through better evidence, faster reconciliations, and more standardised BAS and year-end files, MyLedger’s automation (including AutoRecon, ATO integration and working papers automation) can materially reduce manual error and documentation gaps.

Review one month of a “messy” client using MyLedger and compare:

AI accounting software Australia: governance and risk controls for practices
How to automate bank reconciliation without losing audit trail quality
Division 7A automation: reducing MYR errors and improving file evidence

Frequently Asked Questions

Q: What is the TPB’s main compliance focus for 2026?

TPB’s 2026 compliance focus is expected to concentrate on provable adherence to the Code of Professional Conduct under TASA 2009, particularly reasonable care, competence, confidentiality and integrity, alongside stronger identity/authority controls and governance over lodgments and record keeping.

Q: How do TPB reviews typically fail practices?

TPB reviews commonly go against practices where there is inadequate contemporaneous evidence: no substantiation, weak file notes, absent review sign-offs, unclear scope/engagement terms, and poor governance around who instructed the agent and whether authority was verified.

Q: What are the highest risk tax work areas from a TPB perspective?

The highest-risk areas are those where errors are frequent and substantiation is critical, including work-related expense claims, GST/BAS classification and adjustments, Division 7A, trust distributions, and complex year-end reconciliations—especially where the file does not document the basis for positions taken.

Q: What should be documented to demonstrate “reasonable care”?

To demonstrate reasonable care, documentation should include evidence collected, queries raised, research performed (including references to relevant legislation and ATO guidance where applicable), advice given to the client including risk disclosures, and reviewer sign-off where required.

Q: Can better software reduce TPB risk?

Yes. While software does not replace professional judgment, systems that standardise reconciliation, evidence capture, working papers and review workflows reduce error rates and improve the practice’s ability to produce contemporaneous proof—key factors in TPB assessments.

Disclaimer: This article provides general information only and does not constitute legal or tax advice. Tax and regulatory obligations (including TPB and ATO requirements) are complex and subject to change. Specific advice should be obtained for your circumstances, including where potential TPB investigations or disciplinary actions may arise.