A company, lodging on behalf of an unregistered agent, failed to meet its responsibilities as a registered tax agent. The company lodged tax returns for 19 taxpayers prepared by the unregistered agent in 2019, failing to:  

• ensure that the tax returns were prepared based on the information provided by the taxpayers

• obtain signed declarations directly from taxpayers regarding the accuracy of the information relied upon for the prepared returns and authority for lodging their returns with the Australian Taxation Office (ATO)

• ensure taxpayers received their full tax refunds or at all.

The unregistered agent was a former registered tax agent whose registration was terminated by the Board Conduct Committee (BCC) in 2017 for conduct involving fraud and dishonesty.

While admitting to the above failures, the sole director and supervising tax agent of the company advised us that the arrangement with the unregistered agent was meant to be temporary. The unregistered agent, introduced to him by a mutual acquaintance, had promised to substantiate their credentials and provide signed declarations of clients but failed to do so. 

By proceeding to lodge the tax returns without the signed declarations of the clients, the company agent provided false declarations to the ATO.

The Board Conduct Committee (BCC) considered that though the company might have been intentionally misled by third parties, the company had recklessly facilitated unregistered agent activities.

For the above Code of Professional Conduct breaches (Code items 1 and 7), the BCC suspended the company’s registration for six months and imposed further sanctions which included:

• a written caution

• an order for the supervising tax agent and director to complete a course of education in the Code of Professional Conduct and Ethics within five months.