The Administrative Appeals Tribunal (AAT) has upheld our decision to refuse an applicant’s registration as a tax agent on the basis they did not meet the relevant experience requirement for registration.

In his application for registration Mr Quansheng Dou provided documentation showing he had obtained more than 5-years relevant experience under the supervision of his employer Mr Malcom Howarth. 

Upon review of the application, it was identified that his supervising agent Mr Howarth’s tax agent registration had been terminated by our Board Conduct Committee (BCC) on 1 June 2023. This termination brought into question Mr Howarth’s ability to act as a supervising agent as during supervisory arrangements a registered tax agent must ensure tax agent services provided by them or on their behalf are provided competently.

The BCC found Mr Howarth had breached 3 items of the Code of Professional Conduct (Code) and had ceased to be a fit and proper person. The Code breaches related to Mr Howarth’s long-standing systematic failure to take reasonable care in the preparation and lodgement of client returns, (Code item 7) ascertaining the state of clients’ affairs, (Code item 9) and ensuring that the taxation laws were correctly applied to their circumstances (Code item 10).

In finding Mr Howarth had ceased to be a fit and proper person, the BCC stated he engaged in ongoing behaviour which undermined the integrity of the tax system and the professionalism of tax practitioners and was not a person that the Board, the Commissioner, clients, nor the public could have confidence would perform the functions of a tax agent competently and with integrity. 

During enquiries into his relevant experience, Mr Dou engaged with us in answering all questions and requests for further information. However, minimal evidence was provided regarding supervision and control. 

The BCC decided to reject Mr Dou’s registration application determining the supervision and control exercised by Mr Howarth, was not adequate to meet our relevant experience requirements. 

Senior Member Diana Benk of the AAT affirmed the Board’s decision to reject Mr Dou’s application, highlighting the lack of evidence provided to demonstrate actual supervision and control occurred in the period outlined in the registration application stating:

 “The action of registering an individual as a tax agent is significant. In an increasingly complex and regulated landscape, the ‘supervision and control’ which forms the cornerstone of registration must be demonstrated and established to an actual and persuasive level of satisfaction. This is because the end users and the public in general should be able to trust that an individual registered by the Board has a degree of experience and the core competencies required to meet the complexities of our taxation system and further derive comfort that they have complied with all obligations under the Tax Agent Services Act (TASA) when retaining the services of a paid tax agent.’

This decision affirms our contemporary approach as to what constitutes valid relevant experience and reinforces the importance of adequate supervision and control occurring. Sufficient supervision is a necessary requirement for any tax practitioner registration and enables us to maintain trust within the community. 

The BCC had intimated in its decision that should Mr Dou later obtain the one year of full-time relevant experience (or part time equivalent) under a registered tax agent demonstrating adequate supervision and control, he would likely be eligible for registration.