Investigations into the conduct of a tax agent and his company tax agent practice showed reckless behaviour, disregard for tax laws, failure to take reasonable care, and a lack of honesty and integrity.

The BCC terminated the individual and company registrations, imposing a five-year ban on both the individual and company from applying for registration.

Key findings from our investigations are summarised in the following sections.

Unsubstantiated expense claims

The Australian Taxation Office (ATO) audited 48 clients of the company tax agent’s practice from 2015 to 2017. The audits showed work-related expense (WRE) claims in tax returns that either could not be substantiated or did not relate to assessable income, resulting in WRE claims and rental deductions being disallowed or reduced, with a total tax shortfall of over $317,000.

The ATO also audited one of the agent’s associated entities, disallowing unsubstantiated research and development (R&D) refundable tax offsets, and imposing administrative penalties.

The ATO had previously audited WRE deductions associated with this agent for the 2009-2014 years resulting in significant shortfalls and penalties. Despite the prior outcomes and a direction to undertake further education, the Board noted the agent’s lack of remorse or contrition for its conduct, which indicated a distinct lack of respect for the tax system and client care.

Failure to comply with personal tax obligations

The company, as trustee of a trust, failed to:

• lodge two of the trust’s quarterly BAS due in 2019

• lodge five of the trust’s monthly BAS due in 2019

• pay the trust’s tax debt when due.

The individual tax agent, in his capacity as a director and/or public officer, failed to lodge:

• 13 income tax returns of associated entities for various years from 2014 to 2019

• 7 monthly BAS for associated entities in 2019

• 11 quarterly BAS of an associated entity for the period from September 2015 to June 2018.

The individual agent was also found to have failed to cause associated entities to pay outstanding tax debts, and failed to pay director penalty notices relating to employer obligations. These debts totalled over $250,000 with no payment arrangements in place with the ATO.