Following a TPB investigation, the Board Conduct Committee (BCC) considered the conduct of a tax agent and found they had breached four items in the Code of Professional Conduct (Code). 

When completing a tax agent registration renewal application for a related company, the tax agent made a false statement by answering “No” to the question “Does the company or any of the directors have any overdue tax obligations”, when the company did at that date. The company had an integrated client account debt of approximately $43,000 and an income tax debt of approximately $5,000 – neither of which were under a payment arrangement with the Australian Taxation Office (ATO). Consequently, the BCC determined that the tax agent had breached Code item 1 by failing to act honestly and with integrity.

The tax agent had also failed to pay, or make arrangements to pay, outstanding debts to the ATO in their capacity as director or trustee of related entities. As they did not comply with the taxation laws in the conduct of their personal affairs, the BCC found the tax agent had breached Code item 2.

Additionally, the tax agent did not maintain professional indemnity (PI) insurance that meets the Board’s requirements, thereby breaching Code item 13. Despite requests from the TPB, the tax agent failed to provide evidence that they maintained PI insurance that meets the TPB’s requirements.

The tax agent breached Code item 14 as they did not respond to requests from the TPB in a timely, responsible and reasonable manner. Although the TPB sent numerous correspondences, the tax agent failed to provide a substantive response. One of the tax agent’s related entities remained active as a tax agent during this period, lodging multiple income tax returns for clients, while simultaneously failing to respond to the TPB’s requests for information.

This case was considered along with another submission regarding the conduct of the related company. The tax agent was sole director and sole supervising agent for the company. The BCC found that the company had breached:

• Code item 1 – you must act honestly and with integrity

• Code item 2 – you must comply with the taxation laws in the conduct of your personal affairs

• Code item 13 – you must maintain professional indemnity insurance that meets the TPB’s requirements

• Code item 14 – you must respond to requests and directions from the TPB in a timely, responsible and reasonable manner.

As a result of these breaches, the BCC terminated the tax agent’s registration and that of the related company. In making its decision, the BCC noted that the TPB’s role is to ensure consumer protection and that it has an objective to protect and maintain the integrity of the registered tax practitioner profession.