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A Sydney tax agent has temporarily succeeded in halting the termination of its tax agent registration, with the potential extreme hardship facing the agent and its staff weighing heavily in the decision.
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AAT grants stay on Sydney agent’s termination decision
15 October 2019
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The Administrative Appeals Tribunal (AAT) has granted a stay on the Tax Practitioners Board’s decision to terminate the registration of S&T Income Tax Aid Specialists Pty Ltd.
S&T Income Tax Aid Specialists Pty Ltd, with Sarwat McGuid as its managing director, had its registration terminated on 26 August 2019 after the ATO had lodged a complaint with the TPB following the audit of eight of the tax agent’s clients.
The audit of the eight clients saw the ATO denying 82 per cent of the work-related expense deductions claimed. In addition, the ATO imposed penalties on six of the audited clients personally.
The TPB contended that two examples of claims demonstrated why the agent’s registration should be terminated, including a claim for work-related car expenses for a vehicle that was under novated lease, and a claim of $1,115 for suits to be used by a solicitor.
However, AAT senior member Adria Poljak said the allegations were yet to be tested in the tribunal and noted that the potential consequences to the agent and its staff weighed heavily in favour of granting a stay.
These consequences included how a number of its employees would be placed in a position of financial difficulty if they lost their employment with the agent, the difficulty in them being able to find a new job, and the impact on their respective dependent families.
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In granting a stay, Ms Poljak imposed a number of conditions, including the need for the agent to send a TPB-approved letter to its current clients, advising of the ongoing appeal of the termination decision; not to engage new clients; and for all tax agent services to be supervised by two other registered tax agents.
“I am satisfied that the proposed conditions detailed above provide an appropriate balance between the consequences to the applicant and third parties and the public interest,” Ms Poljak said.
“Given that the majority of the clients who were the subject of the audit personally received substantial financial penalties, it is appropriate that the current clients should be made aware that the competency of the taxation services provided by the applicant is under scrutiny.
“This enables the applicant’s current clients to make an informed decision about their taxation affairs and whether they are sufficiently safeguarded from potential errors and future penalties. This is particularly of importance during the current 2019 tax-time season.”
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