A tax agent has failed to meet their personal tax obligations for non-lodgement of business activity statements (BAS), not paying a tax debt on time and lodging a fraudulent income tax return (ITR).

The tax agent lodged a personal ITR to the Australian Taxation Office (ATO) claiming deductions in excess of $100,000 which could not be substantiated. The ATO compliance audit resulted in a tax shortfall of $60,000 and a penalty for recklessness was imposed.

The Board Conduct Committee (BCC) found that the agent breached Code items 1 and 2 of the Code of Professional Conduct when they failed to:

• act honestly and with integrity by claiming deductions in a personal ITR that the agent should have known were not allowable

• have evidence to substantiate the expenses

• comply with the taxation laws by failing to lodge 13 BAS and pay an income tax debt by their due dates.

The BCC also found the agent breached Code items 7 and 10 by lodging ITRs on behalf of clients in which deduction were overclaimed or incorrect. The agent failed to:

• ensure the tax services provided to clients were provided competently

• take reasonable care to ensure the tax laws were applied correctly to the preparation and lodgement of 32 client ITRs resulting in tax shortfalls and penalties being imposed on these individual clients.

In addition, they breached Code item 14 by failing to respond to requests from the Board during its enquiries and investigation.

Based on the above conduct, which undermines the integrity of the tax system and puts taxpayers at risk, the BCC found the agent had ceased to be a fit and proper person and terminated their registration.