Problem
Peter Simmons is a tax advisor. In examining the detailed wording of certain provisions of the income Tax Acts, he realises that a particular provision omits a critical word enabling taxpayers to reduce their tax by deferring it indefinitely. Since Peter has many clients who could potentially take advantage of this, he begins to develop ways to promote this among his clients.
Peter also discusses this with his close friend, James Webster, who is a financial planner. James has many more clients who could take advantage of this. Peter and James develop a plan where James would promote the plan and charge $500 for every client that enters it with 50 per cent of that fee being paid to Peter. As knowledge of the plan becomes widespread, many clients come to Peter with the intention of engaging in this 'scheme' to reduce their tax.
Task
1. Discuss whether Peter should have promoted his new tax reduction method in the manner that he did? Refer to relevant legislation and guidance material to support your answer
2. What ethical considerations should he have considered and how might they have impacted on his decision? Refer to relevant legislation and guidance material to support your answer