Accountants' President Demands Halt to Partnership Registration Drive
Translated & summarized from Globes by baba
The President of the Institute of Certified Public Accountants, Chen Schreiber, is demanding an immediate halt to a new enforcement campaign by the Registrar of Corporations targeting unregistered partnerships. The campaign, which began with 22,370 warning letters, gives businesses 45 days to register or face sanctions and tax audits. Schreiber criticized the lack of prior consultation with professional bodies, stating it has caused confusion and unnecessary bureaucracy, and called for a joint professional review before any further action is taken.
The story in 5 lines · by baba
- Accountants' President Chen Schreiber demands a freeze on a new drive to register unregistered partnerships.
- The Registrar of Corporations sent 22,370 warning letters, threatening sanctions and tax audits if registration isn't completed in 45 days.
- The Institute of Certified Public Accountants was not consulted prior to the issuance of the warning letters.
- The enforcement action follows criticism from the State Comptroller regarding lost tax revenue from unregistered partnerships.
- The Institute requests a meeting to discuss the process and allow businesses adequate preparation time.
The President of the Institute of Certified Public Accountants, Chen Schreiber, has strongly opposed a new initiative by the Registrar of Corporations to enforce registration requirements on tens of thousands of unregistered partnerships in Israel. Schreiber is calling for an immediate freeze on this enforcement action.
The initiative, revealed by Globes, involves the Registrar of Partnerships and Head of the Corporations Authority, Adv. Shuli Avni-Shoham, sending 22,370 warning letters to unregistered partnerships. These letters inform partners that failure to register within 45 days will result in sanctions and notification to the Tax Authority, potentially leading to audits and tax investigations. The enforcement drive targets various professions, including law firms, accounting firms, and dental practices operating as unregistered partnerships.
In response to the publication, the Institute of Certified Public Accountants sent a letter to Adv. Avni-Shoham, demanding a halt to the 45-day countdown and a suspension of proceedings until professional discussions can be held. The Institute expressed surprise that the letters were sent without prior consultation with accounting representatives who advise these businesses. Schreiber and Vice President Daphna Raviv-Barzilai stated that the unannounced letters have caused concern and uncertainty, necessitating significant time and resources from representatives to address a demand they were not prepared for.
Schreiber emphasized that thousands of businesses should not be forced to act within 45 days under threat of sanctions without prior consultation with their professional representatives. While supporting law enforcement and the regulation of partnerships, he criticized the Corporations Authority's approach, which he believes has created unnecessary pressure, confusion, and bureaucracy instead of clarity and assistance. He reiterated the demand to freeze the 45-day period and related proceedings until a joint professional review can take place, stressing that collaboration between regulators and professionals is crucial for effective and fair implementation.
The enforcement action was reportedly spurred by a harsh critique from the State Comptroller, who found that the Registrar of Partnerships had failed for years to enforce registration, leading to an annual loss of hundreds of millions of shekels in taxes. The Comptroller's report highlighted cases where partners in unregistered partnerships conducting significant transactions failed to declare their partnership status or underreported income.