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A tax agent receives a stay from termination of his registration but must inform his clients.
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Public must be told of tax agent sanctions, says AAT
01 September 2022
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A tax agent whose registration was terminated by the TPB has been granted a stay of the decision by the AAT but with strict conditions.
Terry Borella had his tax registration terminated after the board found he had failed to pay ATO tax debts of more than $110,000 and failed to lodge three business activity statements.
At the time, TPB chair Ian Klug said Mr Borella had failed to meet the standards required of a registered tax agent.
“Mr Borella’s view of competence as a tax agent is too narrow and unacceptable,” said Mr Klug. “Compliance with tax obligations is a fundamental component of the requisite standards of professional and ethical conduct required of registered tax practitioners.”
Mr Borella appealed for a review and stay of the TPB’s decision by the AAT, which was granted.
But the TPB said it should be on the condition that Mr Borella informed existing clients of the action and refrained from taking on new clients.
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Mr Borella claimed that notifying clients was unnecessary as his conduct did not involve any wrongdoing relating to them and it would cause him financial harm.
The AAT disagreed and granted the stay with the client notification condition.
AAT senior member Gina Lazanas said it was in the public interest for Mr Borella’s clients to be told.
“Integrity of the tax agent registration regime would also not be served by granting a stay that did not involve the client notification condition,” said Ms Lazanas.
“The reality is that, even if the tribunal were to accept the substance of his case at the final hearing — which was that he had not engaged in any dishonesty or wrongdoing vis-a-vis his clients — the prospect that the tribunal would ignore his personal tax shortcomings and conclude that Mr Borella should be immediately returned to the register of tax agents is, at best, doubtful.
“The likely consequences of a conditional stay, including that Mr Borella’s clients may choose another tax agent, are due to Mr Borella’s own failures to adhere to the high standards of professionalism which the community is entitled to expect from a registered tax agent.”
Mr Klug said the conditions were necessary so the public was aware of possible sanctions upon their tax agent.
“The condition to notify clients is appropriate — there is a public interest in ensuring clients are aware of the regulatory action so they can make an informed decision on whether they wish to remain a client of Mr Borella,” he said.
“We take our mandate to support the integrity of the tax profession very seriously and will continue to protect the public from this type of behaviour.”
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