The Board Conduct Committee (BCC) found that a company tax agent, with two registered individual tax agents, failed to provide competent services and adequate supervision to its large client base.

The Australian Taxation Office (ATO) audits showed that the company agent had claimed work-related expense (WRE) deductions in the 2018 tax returns for 13 clients without appropriate substantiation. The company agent also had failed to ensure a business activity statement (BAS) of a client contained accurate information and the necessary substantiation before lodging it with the ATO.

The agent had further failed to apply tax laws correctly in making these WRE claims. In claiming meal allowance for some clients, the agent had simply used the maximum amount provided in the ATO guidelines without checking the actual expenses were incurred or entitlements of clients. The agent was also found to have incorrectly applied tax laws in rental property deductions for two clients.

The BCC determined that the outcome of audits showed that the company lacked appropriate supervisory arrangements to ensure competent tax agent services were provided to its nearly 3,000 clients. 

Taking into account the nature of the breaches and the mitigating circumstances, the BCC imposed the following sanctions:

• a written caution

• an order that the company’s two supervising tax agents complete a course in practice management within six months and provide evidence of completion

• an order that the company nominate an additional supervising registered individual tax agent for the company.