Following an investigation, it was found that a tax agent breached Code item 7 of the Code of Professional Conduct (Code) by failing to ensure that a tax agent service that was provided was provided competently. The Board Conduct Committee (BCC) found the tax agent failed to adequately supervise an employee under their control when they allowed their personal myGovID credentials to be used by an employee, which allowed unsupervised access to confidential taxpayer information.

The lack of processes to ensure due diligence in the practice resulted in the employee misappropriating client refunds in excess of $319,000 from 109 clients, through the unauthorised access of the tax agent’s myGovID.

While it is evident the principal tax agent had no involvement in the misappropriation of the client funds, their actions in allowing employees to access their own myGovID credentials demonstrated a lack of competency and a lack of understanding about privacy requirements. The BCC noted that the tax agent should have been aware that their myGovID should not be shared with anyone else and doing so is a serious privacy breach that can lead to severe ramifications. The supervising tax agent has a responsibility under the Code to direct, oversee and check the services provided on their behalf and they should have taken steps to ensure the tax agent services provided on their behalf were provided competently.

The BCC also noted the tax agent had reported the incident to the Australian Taxation Office, the TPB and the police as soon as they became aware of the conduct. In addition, they ensured all funds were repaid to the clients. In light of this, the tax agent was issued a written caution.

We remind all tax practitioners to be vigilant when it comes to their obligations under Code item 7. Sufficient supervision is a necessary requirement for any tax practitioner registration and enables us to maintain trust within the community and to protect the integrity of the tax profession and tax system.  We further remind all tax practitioners of the importance of not sharing myGovID credentials.