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The Administrative Appeals Tribunal has overturned a five-year registration ban imposed on an Adelaide tax agent after it found that the Tax Practitioners Board’s investigation process was “regrettable”.
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Tribunal overturns tax agent’s 5-year ban, laments ‘regrettable’ TPB investigation
29 April 2021
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The tribunal decision will see Nicholas Birdseye and his company, Claim IT SA Pty Ltd, able to reapply for their tax agent registrations after the TPB had terminated their registrations and imposed a five-year banning period in May last year.
The TPB had contended that Mr Birdseye, a tax agent of 39 years, had failed to comply with personal tax obligations, including failing to lodge multiple tax returns and business activity statements, and failing to pay tax debts for three of his related entities totalling over $250,000.
The regulator also relied on the ATO’s characterisation of Mr Birdseye as a “high-risk tax agent” after audits of a sample of his 3,600 client base allegedly found unsubstantiated work-related expense claims, and ruled that he had demonstrated a “pattern of dishonesty” that went beyond being merely careless or reckless.
The TPB further asserted that Mr Birdseye’s unprofessional and unco-operative behaviour in his communication with ATO officers, including an instance where he wished cancer upon a case officer, prevented him from satisfying the fit and proper person registration requirement.
Termination affirmed, banning period overturned
In overturning the maximum five-year disbarment period, AAT senior member Peter Taylor said that the TPB investigation process was found wanting by relying heavily on the Tax Office’s findings.
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“This limited information indicates the board’s investigation, particularly in relation to the ATO client audits, proceeded largely as a document-gathering exercise, and attached primary significance to the appearance (from the ATO’s referral documents) of taxation law non-compliance by Mr Birdseye and Claim It,” Mr Taylor said.
“At least in hindsight, and perhaps not only so, this apparently limited nature of the investigation process was regrettable.”
The tribunal found that the TPB had put forward over 1,100 pages of submissions relating to Mr Birdseye and a further 900 pages relating to Claim It, leaving Mr Birdseye unable to respond to the “sheer volume” of material before him.
The AAT said the ATO audits had failed to conclude if Mr Birdseye did not take reasonable care to ensure claims complied with tax law, with the TPB ultimately abandoning its claims that Mr Birdseye was dishonest.
The tribunal also heard that Mr Birdseye had apologised for his inappropriate and inexcusable remarks to ATO officers, which were said due to “pent-up anger, frustration and resentment”. The AAT’s Mr Taylor was ultimately satisfied that it did not weigh against his fitness as a tax agent.
However, the tribunal found that Mr Birdseye had indeed failed to ensure he met his personal lodgement and payment obligations over several years, justifying the TPB’s decision to terminate his registration.
“The conduct deficiency I have found is significant,” Mr Taylor said.
“Neither Mr Birdseye, nor any other registered tax agent, should be under any misapprehension about the content and significance of the TASA Code obligation to comply with taxation laws in the conduct of their personal affairs.
“Nevertheless, the reality is that Mr Birdseye and Claim It have already suffered a substantial period of loss of registration… I do not think it is appropriate to impose any preclusion period.”
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