Following investigations into a tax agent company and its director, the Board Conduct Committee (BCC) found that the company and its director had breached Code items 1, 2, 3, 7, 13 and 14 by:

• making unauthorised amendments to clients’ tax returns and business activity statements (BAS)
• changing clients’ financial institution account details in income tax returns to a bank account that the director was a sole owner and authorised operator for, without obtaining authority from the clients
• misappropriating over $114,000 in refunds which were transferred into the company’s trust account
• failing to comply with its tax obligations by not lodging outstanding tax returns and BAS, and not paying tax debts of approximately $50,000 by their due dates
• failing to provide tax agent services it invoiced clients for
• failing to notify and pass on refunds to clients in a timely manner
• failing to ensure that the tax agent services it provided was provided competently by:
  • listing a supervising agent for the company without their knowledge, and
  •  submitting several clients returns during a period when the company did not have a supervising agent
• failing to maintain adequate professional indemnity insurance
• failing to respond to our requests for information in a timely, responsible and reasonable manner.

The BCC also determined that the director was no longer a fit and proper person. 

In finding that the director was no longer a fit and proper person to be registered, in addition to causing the above Code breaches, the BCC noted that the director:

• acted dishonestly and without integrity, causing the Australian Taxation Office (ATO) to expend undue resources conducting audits into their related entities and clients of the company
• had made Pay As You Go withholding claims totalling $30,000 in their tax returns but failed to remit these to the ATO for their related entities
• failed to notify us that they were no longer a member of a professional association and ceased to meet this registration requirement 
• engaged in conduct of a dishonest nature with a former employer, resulting in the cessation of their employment.
• misappropriating client ATO refunds when they transferred these amounts into accounts in their own name and misused these funds by redirecting them to gambling sites.

The misappropriation of client funds for financial gain is a serious and inexcusable abuse of their position and a breach of trust. The seriousness and systemic conduct, plus the failure to manage their tax obligations, demonstrated a lack of integrity and a disregard of the tax laws.

As a result, both the company and the individual tax agent registrations were terminated with a maximum 5-year ban from re-applying imposed.