Issued: 19 September 2022
Last modified: 19 September 2022
Date of decision: 21 July 2022
Following a referral from the Australian Taxation Office (ATO), we investigated a registered tax agent’s conduct involving self-managed superannuation funds (SMSF).
The tax agent had lodged 92 SMSF tax returns for 23 clients, falsely declaring that the funds were audited when they had not been. The tax agent included the details of an auditor in these returns indicating that the funds had been audited. However, the auditor responded to our enquiries advising that they had not audited these funds.
Further it was also found that the tax agent had misled 11 clients advising them that their SMSFs had been audited. The agent also invoiced and received payments from 10 clients for the audit work that had not been completed.
It was found that this agent’s misconduct had occurred over several years. The agent also did not respond to some of our enquiries.
The Board Conduct Committee (BCC) found that the agent acted dishonestly, lacked integrity and failed to provide a tax agent service competently. It noted that the agent’s conduct undermined the integrity of the taxation and superannuation systems.
In making these findings, the BCC considered the:
-
number of clients impacted and the potential financial impacts that could befall these clients should the ATO take action against them
-
lengthy period of time over which this conduct occurred
-
seriousness of the misconduct in invoicing and receiving payments from clients for work not undertaken.
The BCC determined that the tax agent had breached the Code of Professional Conduct, and he was no longer a fit and proper person.
Terminating the tax agent’s registration, the BCC prohibited the agent from re-applying for registration for 3 years due to the seriousness of the conduct.
The BCC also terminated the tax agent registration of the agent’s company as the individual tax agent, being the sole director of the company, was not fit and proper, and the company therefore ceased to meet a registration requirement. Taking into account the sanctions imposed on the individual agent, the BCC also applied a ban of 3 years on the company from re-applying for registration.