Following our investigation, the Board Conduct Committee (BCC) found that a tax agent failed to act honestly and with integrity when lodging tax returns for self-managed superannuation fund (SMSF) clients over several years.

Our investigation, which followed a referral from the Australian Taxation Office (ATO), showed that the tax agent:

• lodged 66 tax returns for 10 SMSF clients, falsely declaring that certain registered SMSF auditors named on those returns had completed audits on the SMSFs for the relevant financial years, when in fact those auditors did not complete any audits on the dates stated in the returns, or at all

• misled 3 clients to believe that their SMSFs had been audited prior to the lodgement of their tax returns

• invoiced and received payments from 5 clients for the completion of audits on their SMSFs, when in fact the tax agent had not engaged a SMSF auditor to audit those SMSFs and no audits had been completed.

The BCC also found that, by the above acts, the tax agent failed to provide competent tax agent services to these SMSF clients. The tax agent led the clients to fail to comply with requirements under the Superannuation Industry (Supervision) Act 1993 to ensure that an audit of their SMSF is completed by a SMSF auditor prior to lodging a tax return for the relevant financial year, and to ensure that its tax return lodged with the ATO reports accurate information relating to the completion of an audit.

It was also found that the tax agent failed to lodge several tax returns, business activity statements and an annual GST return by their due dates. The tax agent also falsely declared that they did not have any outstanding personal tax obligations in an annual declaration that they submitted to us when they in fact had an outstanding return.

The BCC determined that the tax agent breached the Code of Professional Conduct, in particular:

• Code item 1 (requirement to act honestly and with integrity)

• Code item 2 (requirement to comply with the taxation laws in the conduct of the tax agent’s personal affairs)

• Code item 7 (requirement to ensure that a tax agent service is provided competently). 

Taking into account the serious and repeated nature of the tax agent’s conduct over an extended period of time, the BCC decided to suspend the tax agent’s registration for a period of 4 months. The BCC further imposed an order on the tax agent, requiring them:

• to provide assistance to affected SMSF clients to arrange for the appointment of SMSF auditors to complete outstanding audits, and to lodge amended tax returns for those clients to report the completion of audits after the expiry of the period of suspension of the agent’s registration

• not to accept any new engagement from a SMSF to provide tax agent services in future, or to provide any further tax agent services to a SMSF except for the lodgement of amended returns required under the order.