BAS agents are asking a question about agentic AI that the regulators have not answered

BAS services became a regulated profession in 2010. The reason given was that the work required competency and consumer protection, and that the public needed to know who was accountable for the advice. Sixteen years later, agentic AI is capable of performing more of that work. An online practitioner discussion is asking the question that follows: if the risk required regulation in 2010, what has changed about that risk now?

The question matters because of what the Commissioner of Taxation told the profession four years ago. In a September 2022 keynote at Xerocon Sydney, the Commissioner said: “I want to assure you that we have no intention of designing tax professionals out of the system as technology progresses.” Four years on, practitioners are asking what that commitment looks like in practice when the technology is this capable.

The question is less about the technology and more about the regulatory framework that sits around it.

The Commissioner’s Xerocon address set out the ATO’s digital strategy, pointing at a “fully digitalised” tax system by 2030. It introduced the public to Tax Admin 3.0, where “reporting, payment and real-time compliance checks coincide with the taxable event.”

Within that vision, the Commissioner was clear that tax professionals had a continuing role. “You are our partners in the tax system.” He was equally clear that the role would change. “The role of agents and other intermediaries is changing, with new entrants and new ways of operating. We’ll do everything we can to support the evolution of the role of agents and others in the system.”

The caveat was explicit: “But you must understand that if your business model is high-volume, low-margin, simple tax returns, your business will not be viable in 3 to 5 years. You should be looking to diversify to remain viable longer-term.”

The direction was set. The ATO’s vision pointed at real-time GST reporting, real-time PAYG instalments calculated by business software and what the speech called a potential “BAS-free future.” Natural systems carrying the compliance work. Tax professionals doing higher-value work alongside it.

The first is the capability of general-purpose AI. In 2022, the frontier conversation in tax was about structured data flows between systems. In 2026, it is about agents that can interpret documents, classify transactions, apply tax rules and prepare compliance work with reduced human review.

The second is the regulatory response. On 22 July 2026, the Tax Practitioners Board published TPB(GS) 55/2026: The use of Artificial Intelligence and the Code of Professional Conduct. The guidance explains how existing obligations under the Tax Agent Services Act apply when AI is used in the provision of tax agent services. It is explicit that tax practitioners remain responsible for the services they provide, whether or not AI is involved, and that AI outputs must be assessed and supplemented by professional judgement.

The third is the enforcement framework behind it. The Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Act 2026 materially expanded the TPB’s regulatory powers, including new civil penalties and a 90-day interim suspension power.

For registered practitioners, the position is unambiguous. Code obligations apply to AI use. Penalties for breach are higher. Enforcement powers are stronger.

The question practitioners are now raising is what applies to the technology itself when it performs the same work.

The core question in the online discussion is this. BAS agents became a nationally regulated profession in 2010 under the Tax Agent Services Act. The reasons were explicit: Parliament determined that BAS services required appropriate competency and consumer protection. BAS agents must study, gain experience, register, undertake continuing professional education, carry professional indemnity insurance, comply with professional standards and accept personal accountability for their work.

If agentic AI is capable of performing GST classification, transaction coding, BAS preparation and other work that previously required a registered BAS agent, two scenarios present themselves.

Scenario one. The work remains regulated. The AI tool, or the entity deploying it, carries the same obligations as a human BAS agent, including competency standards, insurance, Code of Professional Conduct compliance and accountability for errors.

Scenario two. The work is treated as something other than a regulated BAS service. The AI tool performs it, the taxpayer approves the output and the regulatory boundary does not apply.

If scenario two is the direction, practitioners in the discussion are asking a follow-up question. Does that mean an unregistered human performing the same work for a fee should also be allowed to do so?

The point is not whether AI should or should not be used in BAS compliance. The point is whether the risk Parliament identified in 2010 has disappeared because the work is being performed by software, or whether it has simply moved.

The discussion raises adjacent questions that neither the 2022 speech, the TPB guidance nor the current public commentary has resolved.

Who is accountable when AI gets a GST treatment wrong? Under TPB(GS) 55/2026, a registered practitioner using AI remains accountable. The position where AI operates independently of a registered practitioner is less clear.

What competency standard applies to the AI? A registered BAS agent must meet specific educational, experience and continuing professional education requirements. The equivalent standard for an AI tool performing BAS work is not currently defined.

What insurance applies? Registered BAS agents carry professional indemnity insurance as a condition of registration. Whether equivalent cover is available, affordable or sufficient for autonomous AI performing the same work is a question practitioners are raising with their underwriters.

What does the taxpayer actually get? Participants in the discussion have noted that a taxpayer who moves from a registered BAS agent to an AI-driven solution may pay less for the compliance work, but may need to add cybersecurity, backup, business continuity and additional insurance to replace the protections that came with the registered practitioner relationship. The commercial comparison is not yet well understood.

Not every voice in the discussion agrees on the direction. Some practitioners have argued that the shift is overstated, that small business owners want the personal touch and that AI will not lie awake worrying about an ATO call. Others have pointed out that the registration framework already has odd edges, including that an unregistered outsourced CFO cannot lodge a BAS while an unregistered casual employee can.

These disagreements are not the point. The point is that the regulatory question is open, and the direction being set now will shape the profession for the next decade.

For BAS agents and tax agents reading this, the practical implications are three.

First, TPB(GS) 55/2026 applies now. Any AI used in the provision of tax agent services sits within the Code of Professional Conduct, and the practitioner remains responsible. Firms without an AI policy are exposed on both the substantive obligation and the enforcement capacity behind it.

Second, the 2022 Commissioner’s caveat remains relevant. High-volume, low-margin compliance work was flagged as a model unlikely to remain viable. Firms built on that model are the most exposed to the direction the technology is taking.

Third, the regulatory question practitioners are now raising is one the profession will need to answer publicly. The answer will come through TPB consultations, Treasury processes and professional body submissions. Firms with a view on it are the firms who should be making it known.

The 2022 Xerocon speech was clear about one thing. “I want to assure you that we have no intention of designing tax professionals out of the system as technology progresses.” Four years in, the question practitioners are starting to ask is what that commitment looks like in practice when the technology is this capable.