The federal government has begun consultation on the next tranche of reforms to improve integrity and accountability in the tax system.
Tax agents overwhelmingly do the right thing but the PwC leaks scandal shows the current regulatory framework is not up to scratch in responding to misconduct, according to Financial Services Minister Stephen Jones.
To this end, the sanctions regime available to the Tax Practitioners Board will be tightened to bolster deterrence.
Mr Jones said the government was seeking ways to expand on sanctions including reintroducing criminal penalties for unregistered practitioners, broadening and increasing civil penalties and introducing infringement notices.
It is also consulting on legislating new obligations for tax agents to manage conflicts of interest and prevent unauthorised disclosure of confidential information.
The changes would additionally mean agents would have to advise clients if they are being investigated or sanctioned, and guarantee adequate supervision and quality assurance arrangements.
Interested stakeholders are encouraged to provide feedback to the 27-page consultation paper by January 21.
PwC was last month fined nearly $100,000 and found to have discredited the accounting profession by a disciplinary tribunal.
The embattled firm has faced sustained criticism and is accused of abusing its trusted role as an adviser after staff leaked information about proposed federal government tax changes to clients.
The company's former head of international tax Peter Collins is being investigated by federal police over the improper use of confidential Commonwealth information.
In January, Mr Collins was deregistered by the Tax Practitioners Board which found PwC Australia failed to properly manage conflicts of interest when confidential information was shared with partners and staff.
Several have since been sacked.
