A referral from the Australian Taxation Office (ATO) led us to investigate the conduct of a tax agent.

It was found that this tax agent had failed to pay an outstanding tax debt when it fell due.

Further, the ATO had audited the tax agent’s own tax affairs and the findings showed that the tax agent had:

• understated their income in their tax returns which resulted in significant amendments and penalties

• provided false and misleading statements to the ATO.

The tax agent also failed to comply with a formal notice issued by the ATO to provide information in relation to this audit.

The tax agent was the sole director and sole supervising tax agent of a company tax agent that has ceased to be registered with the Board.

The ATO undertook audits of tax returns of clients of the company and identified overclaimed or incorrect deductions for work related expenses in the tax returns. The tax agent had failed to engage with the ATO during the audits of their clients.

Our investigations showed that the tax agent failed to have adequate supervisory procedures in place to ensure competent tax agent services were provided on the company agent’s behalf.

Decision

The Board Conduct Committee (BCC) noted that the tax agent had a history of failing to comply with their tax obligations, resulting in the Board previously imposing sanctions.

The BCC observed that the tax agent demonstrated disregard for their obligations as a registered tax practitioner and undermined the professional standards expected of tax practitioners. The tax agent showed an intentional disregard for the tax laws and the ATO.

From the above findings, the BCC determined that the tax agent:

• failed to comply with the Code of Professional Conduct (Code items 2, 7 and 11)

• ceased to meet the registration requirement of being a fit and proper person.

The seriousness of the tax agent’s conduct led the BCC to terminate the tax agent’s registration and impose a 2-year ban on the agent from reapplying for registration.