In July 2023, the Administrative Appeals Tribunal (AAT) upheld our decision to terminate Ms Jennifer Clifford’s tax agent registration, after she misled us and the Australian Taxation Office (ATO).  We also imposed a 2-year ban on re-applying for registration, which was later varied by the AAT to 18-months. This variation was to account for the time that Ms Clifford had already been deregistered. 

Our investigation revealed Ms Clifford had breached 4 items of the Code of Professional Conduct (Code) and ceased to be a fit and proper person. She made false and misleading statements and had significant outstanding tax debts of over $145,000 with no payment plan in place. 

Additionally, she incorrectly lodged multiple self-managed superannuation fund annual returns without obtaining the required audits. She informed us she knew there were no auditor’s reports when she lodged the returns, and claimed she only did so to stop the ATO asking why she had not lodged her clients’ tax returns.

During the AAT hearing, Ms Clifford submitted that her ongoing health issues and personal circumstances were mitigating factors. Although the AAT acknowledged her personal circumstances, it found her conduct was not an isolated lapse of judgement, but a pattern of conduct over significant periods of time, for which there was no excuse.

Ms Clifford went on to appeal the AAT’s decision to the Federal Court on the basis the AAT failed to consider:

• alternative sanctions available under the Tax Agent Services Act 2009 (TASA)
• setting aside our termination decision and substituting it with a lesser sanction, or no sanction at all
• she was winding down her practice and not accepting new clients
• she was a sole tax practitioner and termination of her registration would cause prejudice to her clients.

In dismissing the appeal, Horan J did not accept the AAT was required to consider the availability of lesser alternative sanctions. Having found Ms Clifford was not a fit and proper person to be registered, the TPB was entitled to terminate her registration under the TASA. Horan J also found it was clear that termination was not treated as an automatic consequence and there was no failure to appreciate the range of sanctions available in respect to breaches of the Code.

Considering our findings about the seriousness of Ms Clifford’s conduct, our clear focus in terminating her registration was to protect the public. She exposed clients to the risk of significant penalties – a tax agent acting honestly and competently would not expose their clients to such a risk.