The Board Conduct Committee (BCC) terminated a tax agent’s registration after our investigations revealed they had breached several items in the Code of Professional Conduct (Code).  

TPB investigations showed the tax agent neglected to make sufficient enquiries when preparing and lodging income tax returns (ITRs) for clients. They did not ensure there was sufficient evidence to substantiate the work-related expense (WRE) deductions claimed for several clients and, as a result, the Australian Taxation Office (ATO) audited the clients and reduced the claimed WRE deductions. Because the tax agent had failed to provide tax agent services competently, the BCC found they had breached Code item 7.

The tax agent also breached Code item 1 by failing to act honestly and with integrity. They made a false statement in their 2019 annual declaration to the TPB, stating they did not have any outstanding tax obligations when they in fact did. Additionally, the tax agent breached Code item 2 for failing in their personal capacity, and their capacity as a director, to:

• lodge ITRs and business activity statements (BAS) by their respective due dates

• pay income tax and integrated client account debts by their respective due dates

• give written notice of a change of trustee of a superannuation trust within 28 days.

The tax agent also provided tax agent services through an unregistered preparer, even after being advised by the TPB of their obligation to ensure the preparer was registered with the TPB. Consequently, the BCC found the tax agent had breached Code 11 by knowingly obstructing proper administration of taxation laws. 

Based on this conduct, the BCC determined the tax agent was no longer eligible for registration as they no longer met the registration requirement that they be a fit and proper person. Accordingly, the BCC decided to terminate the tax agent’s registration. As the tax agent had previously been terminated by the BCC for similar conduct, and due to the seriousness of the tax agent’s conduct, the BCC prohibited them from re-applying for registration for three years.