Following an investigation into the conduct of a registered tax agent company, it was found that its sole director and supervising agent had breached Code item 7 by failing to ensure that a tax agent service that was provided was provided competently.

In this case the Board Conduct Committee (BCC) found the tax agent had failed to ensure the preparation and lodgement of tax returns for clients were prepared accurately. This resulted in ATO compliance activities finding overclaimed or incorrect deductions that did not have a sufficient nexus to assessable income and could not be substantiated.  

There was no reasonable care taken and no adequate processes in place to ensure:

• sufficient enquiries were made to correctly ascertain these clients’ state of affairs
• taxation laws were applied correctly to these clients’ circumstances, and
• statements made to the Commissioner of Taxation on behalf of these clients were true and correct.

Taking into account the nature of the misconduct the BCC decided to issue the tax agent with a written caution and an order to complete a course on the Tax Agent Services Act 2009. We want to work with registered tax practitioners to support compliance, protect the integrity of the tax system, and safeguard consumers. We will do this by applying a graduated level of administrative sanctions and educating tax practitioners wherever appropriate.