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A tax agent will be suspended rather than terminated after the Administrative Review Tribunal determined her contraventions were less serious.
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Tribunal varies TPB decision to ban tax agent
27 February 2025
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9 minute read
The Administrative Review Tribunal has varied a decision to terminate a tax agent for two years by replacing it with a suspension period instead.
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The Tax Practitioners Board decided to terminate the tax agent following a referral from the ATO. The referral advised the board that the applicant had been selected by the ATO for its monitoring program concerning income tax returns lodged for individual taxpayers who were clients of the applicant’s tax practice.
The reason given by the ATO for the selection of the applicant’s clients was the higher-than-average amounts claimed by the applicant’s clients for work-related expenses and other deductions in some of the income tax returns that had been prepared and lodged by the applicant.
Ultimately, 25 of the applicant’s clients were audited by the ATO over 10 years. The audit resulted in the ATO amending all of the 25 selected taxpayers’ respective income tax returns.
The board commenced an investigation in September 2022 concerning allegations that the applicant's conduct may have breached the code.
It sent a letter to the tax agent in February 2023, requesting a written response from her regarding a range of alleged breaches, including late lodgements of BASs and personal income tax returns.
The TPB wrote to the applicant in March 2023 to advise her that after investigating her conduct, it had decided to terminate her registration as a tax agent with effect from 19 April 2023.
The board also advised her that she was prohibited from applying for registration for two years, effectively banning her for two years until 19 April 2025.
The applicant in the case then filed an application for a review of the board's decision.
In its decision, the tribunal noted that the applicant's failure to lodge her income tax returns, business BASs and partnership BASs in a timely way over a long period was difficult to reconcile with her long career as a registered tax agent.
"Given the applicant is seeking a review of the board's decision to terminate her tax agent registration for a period of two years, one would have thought the applicant would have worked diligently to ensure her personal tax affairs and the partnership tax affairs were in order before the matter was heard. The fact that they were not is a serious matter," the tribunal said.
"It is doubtful, given the applicant has not rectified her personal tax affairs, that she appreciates the significance of her wrongdoing and there will not be any lapse in the future of the standards the board requires of all tax agents."
The tribunal also raised concerns that there was no evidence that the applicant would not repeat her lax approach to the preparation of tax returns for taxpayers who have been her clients for many years.
Given these findings, the board said that some form of regulatory action was justified in the circumstances.
The tribunal said if it were not for the imminent expiry of the two-year ban and the applicant's personal and partnership tax affairs remaining outstanding at the date of the hearing, it would have varied the board's decision to a suspension of one year.
It noted that the contraventions in this case were less serious and of less concern to public interest than in other cases involving Code of Conduct breaches by tax agents.
However, as the applicant had not used the two-year ban period to file all outstanding income tax returns and BASs for her business and partnership, or undertaken any course of study to satisfy the board's CPE requirements, the tribunal decided to vary the decision by imposing a suspension that would end once the applicant brought her tax affairs up to date and completed 30 hours of CPE.
"Once the suspension is lifted the required number of CPE hours for tax agents and BAS agents is to be completed over the period of 3 years," it said.
"On satisfying the board that the applicant has completed the necessary hours of continuing professional education for a BAS agent and has no outstanding income tax returns or BASs for the business or the partnership the applicant is to be reinstated as a registered tax agent."
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