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This paper investigates the outsourcing of income tax return preparation by Australian accounting firms. It identifies the extent to which firms are currently outsourcing accounting services or considering outsourcing accounting services, with a focus on personal and business income tax return preparation. The motivations and barriers for outsourcing by Australian accounting firms are also considered in this paper. Privacy, security of client data, and the competence of the outsourcing provider’s staff have been identified as risks associated with outsourcing. An expectation relating to confidentiality of client data is also examined in this paper. Statistical analysis of data collected from a random sample of Australian accounting firms using a survey questionnaire provided the empirical data for the paper. The results indicate that the majority of Australian accounting firms are either currently outsourcing or considering outsourcing accounting services, and firms are outsourcing taxation preparation both onshore and offshore. The results also indicate that firms expect the volume of outsourced work to increase in the future. In contrast to the literature identifying labour arbitrage as the primary driver for organisations choosing to outsource, this study found that the main factors considered by accounting firms in the decision to outsource were to expedite delivery of services to clients and to enable the firm to focus on core competencies. Data from this study also supports the literature which indicates that not all tax practitioners are adhering to codes of conduct in relation to client confidentiality. Research identifying the extent to which accounting services are outsourced is limited, therefore significant contributions to the academic literature and the accounting profession are provided by this study.

The Australian Charities and Not-for-profits Commission Act 2012 (Cth) commenced on 3 December 2012, delivering Australia a federal regulator for not-for-profits, the Australian Charities and Not-for-profits Commission (‘ACNC’). The ACNC is expected to effect a ‘fundamental change’ from the current system where the Australian Taxation Office, as the ‘default Commonwealth regulator’, has been ‘unable to take action commensurate to the circumstances being addressed’. However, the ACNC’s achievement of its regulatory goals, especially by means of proportional enforcement action, may be stunted by regulatory overlap with the Commissioner of Taxation. This overlap is primarily engendered by additional tax endorsement requirements for charities to access tax concessions, such as income tax exemption. In particular, the extension of endorsement special conditions under the Tax Laws Amendment (2013 Measures No 2) Act 2013 (Cth) raises the possibility that charities may face ‘fierce extremes’ between milder, more nuanced, ACNC compliance action and revocation of income tax endorsement by the Commissioner of Taxation.

This paper concerns the 2011 Australian Government’s then proposed changes to the transfer pricing rules, referred to as the stage one amendments, and the consultation process to provide interested parties with an opportunity to comment. The paper covers the external submissions received, with a focus on the dominant issues raised in the submissions regarding the planned changes to the transfer pricing rules. Also examined is the extent to which the issues advanced by the interested parties were included in the Bill that was tabled in parliament for debate, and finally enacted in September 2012 as Tax Laws Amendment (Cross-Border Transfer Pricing) Act (No. 1) 2012 (Cth). Using the methodology of grounded theory, we analyse 37 public submissions from the stage one consultations to ground a theory and explain the submitters’ issues of concern. The key concerns about the proposed amendments are: opposition to any retrospective powers; requests protection for taxpayers from penalties arising from a transfer pricing amendment; resistance to assigning ‘separate taxing powers’ to Australian tax treaties; and a clear aversion to any ‘discrimination’ against foreign related parties that are resident of a country that has a tax treaty with Australia. Transfer pricing literature is used to validate the results. While there were consistent patterns of concern in the submissions from the interested parties, the adoption of their requests was low in the stage one amendments.