Following a referral from the Australian Taxation Office (ATO), we conducted an investigation into the conduct of a tax agent which revealed they had breached multiple requirements of the Code of Professional Conduct (Code). On the basis of that conduct, the Board Conduct Committee (BCC), determined that the tax agent had ceased to meet the fit and proper person registration requirement and terminated the tax agent’s registration. Due to the seriousness of the conduct, the tax agent was also prohibited from applying for registration for a period of two years. 

The BCC determined the tax agent had breached:

• Code item 1 – you must act honestly and with integrity

• Code item 2 – you must comply with the taxation laws in the conduct of your personal affairs; and 

• Code item 7 – you must ensure that a tax agent service you provide, or that is provided on your behalf, is provided competently.

The tax agent was found to have:

• made a false and misleading statement in their annual declaration 

• made a false and misleading statement in their application for renewal of their tax agent registration

• provided false and misleading information to a staff member, causing them to make a false and misleading statement in the application for renewal of the tax agent’s associated company registration

• failed to address their outstanding personal tax obligations for themselves and a number of associated entities.

This case was considered along with another submission regarding the conduct of a tax agent company of which the tax agent is sole director. The BCC established that the tax agent company breached:

• Code item 1 – you must act honestly and with integrity

• Code item 2 – you must comply with the taxation laws in the conduct of your personal affairs 

• Code item 7 – you must ensure that a tax agent service you provide, or that is provided on your behalf, is provided competently

• Code item 9 – you must take reasonable care in ascertaining a client’s state of affairs; and 

• Code item 10 – you must take reasonable care to ensure taxation laws are applied correctly.

In particular, the tax agent company failed to:

• take action to address significant outstanding tax debts

• take reasonable care to ascertain the state of affairs of its clients that were relevant to BAS lodged and JobKeeper payment applications made on their behalf

• take reasonable care to ensure that taxation laws were applied correctly when advice was provided to its clients in the context of preparing and lodging BAS and making JobKeeper payment applications on their behalf.

The BCC terminated the company’s tax agent registration.

Two supervising tax agents of the tax agent company were also issued with administrative sanctions for breaching Code item 7 as they failed to ensure that tax agent services provided to clients of the tax agent company were provided competently.

In making its decisions, the BCC noted that the Board’s role is to ensure consumer protection and that it has an objective to protect and maintain the integrity of the registered tax practitioner profession.