Two enforcement stories landed nine days apart in September 2026. Neither is really about the other, but read together they describe the same operational reality for a bookkeeping practice.
On 21 September, the ATO announced that successful non-lodgment prosecutions had jumped more than 80% over the two years to 2025–26 — a warning aimed at shadow economy operators. On 18 September, the Tax Practitioners Board published guidance confirming its enhanced sanctions framework takes effect on 1 October 2026 — a change aimed at registered and unregistered practitioners.
One targets the client who does not lodge. The other targets the standard of care around them. Both make the same thing more expensive: a client whose books are quietly behind, and a practice that has not documented what it did about it.
What the ATO actually announced
According to Accountants Daily's coverage of the release, the ATO's media release put the numbers at:
- Over 350 individuals and entities prosecuted over the past two years.
- More than 305 convictions — a roughly 60% increase in the conviction count.
- More than $2.7 million in court-imposed fines.
- Successful non-lodgment prosecutions up more than 80% between 2024–25 and 2025–26.
The conduct that triggers prosecution is not exotic: non-lodgment of returns, failing to pay tax or super obligations, demanding cash to dodge tax, and workers missing out on entitlements. Geographically, Queensland (28%), Western Australia (26%) and NSW (20%) accounted for almost three-quarters of 2025–26's successful non-lodgment prosecutions.
Beyond the fine, Accountants Daily reports the ATO listing the wider cost of a conviction: a criminal record, loss of customer and community trust, business closure, difficulty getting finance or insurance, and — the line that gave the article its headline — the possibility of prison time for the more serious cases.
The ATO's advice to practitioners, attributed to Assistant Commissioner Tony Goding, was to encourage accurate reporting and good record-keeping, and to help clients understand their obligations before lodgment deadlines arrive rather than after.
What the TPB actually announced
Nine days later, Accountants Daily reported that the Tax Practitioners Board had published guidance on its enhanced sanctions framework, effective 1 October 2026. The powers include:
- Criminal penalties for unregistered entities providing tax agent services.
- New civil penalties for registered practitioners who breach the Code of Professional Conduct.
- Penalties for false or misleading statements made by unregistered entities.
- Infringement notices and enforceable voluntary undertakings, short of a full disciplinary hearing.
- Contingent and interim registration suspensions of up to 90 days.
- A doubled maximum non-application period for registration — from 5 to 10 years.
An earlier Accountants Daily piece on the same reform package, published in July, described these as new tools the TPB gained specifically so it can respond to misconduct without every case escalating straight to termination. The TPB itself described its intended approach as "proportionate and risk-based," and said compliant practitioners should not be concerned by the reforms.
That last point matters. This is not a story about honest practices suddenly being at risk. It is a story about the bar for "compliant" now having more graduated, more frequently used enforcement sitting underneath it — infringement notices and interim suspensions instead of a binary registered/deregistered outcome.
Why these two stories are really one story
Non-lodgment does not start the week a prosecution is filed. It starts months or years earlier, as a client who fell behind on reconciling their books, stopped responding to requests for statements, and became progressively harder to bring current. By the time it is a prosecution, it has usually been an open, unresolved file sitting somewhere in a practice's workflow for a long time.
That is the part a bookkeeping practice actually controls. You do not decide whether a client lodges. You do control whether their books are current enough that lodging is possible, and whether there is a dated record of you telling them so.
Under a sanctions framework that now has infringement notices and interim suspensions as intermediate steps — rather than "nothing happens" or "termination" as the only two outcomes — that dated record stops being a nice-to-have. If a client's non-lodgment becomes a TPB matter, the question asked of the practitioner is not just "did you know," it is "what did you do, and when, and can you show it."
Where this actually breaks in a practice
The failure mode is familiar to anyone who has managed a client book: a client's statements arrive late, or arrive but do not reconcile cleanly, and the file quietly moves to the bottom of the pile. Nobody decides to let it slide. It happens one missed month at a time, and by the time someone looks up, six months have become eighteen and the client is now a non-lodger with an SG shortfall on top.
The three points where this is catchable, before it becomes anyone's prosecution or sanction:
1. A client stops sending statements, and nothing tracks it as an exception. If "no statement this month" looks the same in your workflow as "nothing to do this month," a genuinely behind client is invisible until someone manually notices.
2. Chasing happens, but nothing dates it. A phone call and a text message are real follow-up, but if neither is recorded against the client file, you have no record six months later of having done it.
3. The books reconcile eventually, but nobody can say when "eventually" started. A client caught up in November after being six months behind looks, from the outside, identical to a client who was never behind. The record of the gap — and of what you did during it — is what a regulator or a court actually wants to see.
What to do this quarter
Run an aged list of clients by last-reconciled date, not last-contacted date. Contact logs tell you what you did. Reconciliation dates tell you what state the books are actually in — which is what the ATO and the TPB both care about.
Put the chasing on the record, automatically. A request that goes out from a system and lands as a dated, timestamped entry against the client file is worth more under scrutiny than an email you may or may not still have.
Decide, in writing, what "behind" triggers. A threshold — say, two consecutive missed reconciliation cycles — that automatically escalates to a documented conversation with the client, rather than relying on someone remembering to flag it.
Do not let suspense or holding-account balances stand in for "reconciled." A client who is technically lodging but has months of transactions parked in suspense is not current in any sense that would hold up to a closer look.
Where ReconLink fits, and where it doesn't
ReconLink reads the PDF, CSV and Excel statements Australian banks actually produce, codes around 99% of lines before you look at them, and shows the rule behind every coded line — so the record of what was done, and how, exists whether or not anyone remembers to write it down separately. It chases clients by email for missing statements and receipts on a schedule rather than when someone remembers to ask (SMS chasing is available on paid plans and is metered, not unlimited). It builds the BAS worksheet — G1 through G19, 1A and 1B — plus the P&L, TPAR and depreciation schedule, from the coded transactions.
$99 a month, ex GST, unlimited clients and unlimited seats. Thirty days free, no card.
What it will not do is decide whether a client is fit to keep as a client, or make the phone call telling them they are six months behind. Those decisions, and the professional judgement behind them, stay with the registered practitioner — which is precisely the thing both of these September announcements are about.
Frequently asked questions
How much did non-lodgment prosecutions increase, according to the ATO? The ATO reported successful non-lodgment prosecutions up more than 80% between 2024–25 and 2025–26, part of more than 350 prosecutions, over 305 convictions, and more than $2.7 million in fines over the two-year period.
When do the TPB's new sanctions powers take effect? 1 October 2026. The framework introduces infringement notices, enforceable voluntary undertakings, interim suspensions of up to 90 days, a doubled maximum registration-termination period (5 to 10 years), and criminal penalties for unregistered entities providing tax agent services.
Do the new TPB powers apply to unregistered people, registered practitioners, or both? Both, in different ways. Unregistered entities face new criminal penalties and penalties for false or misleading statements. Registered practitioners face new civil penalties for Code of Professional Conduct breaches, alongside the existing disciplinary framework.
Which states had the most non-lodgment prosecutions? Queensland (28%), Western Australia (26%) and NSW (20%) accounted for almost three-quarters of successful non-lodgment prosecutions in 2025–26, per the ATO's release.
What does this mean practically for a bookkeeping practice? Track how current each client's reconciliation actually is, not just whether they have been contacted. Keep a dated record of chasing and of any threshold that triggers escalation. A client who is quietly months behind is the shared risk in both announcements — to the client, and increasingly to the practitioner's own documented conduct.
The short version
The ATO is prosecuting non-lodgment more, and from 1 October the TPB has more graduated ways to act on practitioner conduct short of termination. Neither change is about honest practices doing what they already do. Both raise the value of being able to show, with dates, that a behind client was tracked and chased — which is a reconciliation-workflow problem before it is anything else.