A company tax agent, and an individual tax practitioner who was engaged as a supervising agent of the company, have had their registrations terminated, after our investigation uncovered serious unethical practices and conduct contravening key principles of the Code of Professional Conduct (Code) and the Tax Agent Services Act 2009.

The individual tax practitioner was found to have breached the Code by, among other conduct, accepting the position of supervising tax agent, in exchange for remuneration, for 4 companies without the intention or ability to adequately and competently supervise the tax agent services provided by the companies. 

To remain registered with us, companies must have a supervising registered tax practitioner to ensure the services they provide are provided competently. This is an ongoing registration requirement for all companies and partnerships.

In their capacity as both a director and sole supervising tax agent for the company, the individual tax practitioner failed to take any action to prevent and/or was wilfully blind to the conduct of an individual unregistered preparer associated with the company. This allowed the unregistered preparer to instruct and persuade other tax preparers working for the company to carry out unethical work.

Under the direction of the unregistered preparer, the company prepared and lodged income tax returns through myGov without adequate supervision. In addition, the company had policies and procedures in place that intentionally instructed the unregistered preparers working on the company’s behalf, to disregard ascertaining the clients’ real taxation position during preparation of returns. This resulted in tax shortfalls and penalties being imposed on 20 clients during the 2019 and 2021 years. 

This case highlights how a registered tax practitioner can enable an unregistered preparer to provide tax agent services illegally. In these types of arrangements, the tax practitioner primarily carries the risk and the unregistered preparer stands to gain the most benefit. 

The individual tax practitioner involved in this serious misconduct was found not to be a fit and proper person to remain registered. The termination of their registration and the company’s registration included a 2-year ban on reapplying.

We will take swift and firm action in these situations and will not allow a tax practitioner to participate in conduct that detrimentally impacts the whole tax profession by allowing unregistered preparers to illegally infiltrate the system and put consumers at risk.