Issued: 8 February 2021
Last modified: 8 February 2021
Date of decision: 1 October 2020
A tax agent has received a six-month suspension of his registration along with other sanctions, after being referred to us by the Australian Taxation Office (ATO). Our subsequent investigations into the conduct of the tax agent revealed he breached multiple provisions of the Code of Professional Conduct (Code). He failed to act honestly and with integrity in his dealings with us, comply with his personal tax obligations and provide competent tax agent services.
The Board Conduct Committee (BCC) determined that the tax agent breached Codes 1 and 2 when he:
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made a false and misleading statement to us advising he didn’t have any relationship with a company client (for which he lodged BAS containing significant claims that were disallowed following ATO audits), when in fact he was a previous officeholder and had business relationships with other previous officeholders of the company
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didn’t comply with the taxation laws in the conduct of his personal affairs, in his capacity as the sole director of a corporate trustee for a trust – he allowed the trust to accrue a significant outstanding tax debt without taking adequate steps to repay or enter into a payment plan with the ATO for the debt, and caused the trust to fail to lodge its income tax returns and BAS by their due dates.
The BCC also found that the tax agent breached Code 7 by not providing tax agent services competently when he:
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failed to have adequate supervision and review measures in place in his practice and allowed his registration number to be used by another unregistered tax practitioner – this resulted in the lodgement of multiple incorrect self-managed superannuation fund (SMSF) annual returns under his registration number which declared that the operations of the SMSF had been audited by a particular auditor, when in fact they had not been audited at all
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lodged BAS for company clients, claiming significant input tax credits that were disallowed following ATO audits which concluded the companies weren’t entitled to claim the credits as they weren’t carrying on an enterprise for GST purposes and had not made creditable acquisitions – this included a company whose business circumstances the tax agent ought to have had sufficient knowledge of, as he was a previous director and secretary
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failed to have in place adequate trust account arrangements to receive and account to clients for tax refunds and other monies held on trust, by not keeping his personal or business funds separate from client monies in his account and utilising funds in this account for payment of personal or business expenses.
As a result of the tax agent’s behaviour, the BCC decided to impose the following sanctions:
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a written caution
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six-month suspension of the tax agent’s registration
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an order requesting the tax agent, as the sole director of the corporate trustee for the trust, to bring all outstanding income tax return and BAS lodgements up to date and take steps to address its outstanding tax debts
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an order to successfully complete courses of education relating to the Tax Agent Services Act 2009 (including the Code), practice management and GST fundamentals, and provide evidence of completion.