On 20 April 2021, the AAT affirmed decisions of the Tax Practitioners Board (TPB) to cancel the tax agent registrations of an individual (Mr Birdseye) and a company he controlled (Claim IT (SA) Pty Ltd), but has set aside a 5-year ban on applying to be registered again. Nick Birdseye practiced in Adelaide and might be described, by some, as ‘colourful’.

See below for further details.

[Tax Month – April 2021]

 


Mr B was a registered tax agent who conducted his business through a family trust. The corporate trustee of the trust (C Ltd) was also a registered tax agent. Following misconduct complaints to the TPB by the ATO, the TPB investigated Mr B and C Ltd and in February 2020 decided to terminate their registrations. The TPB also imposed a 5-year ban on them applying to be registered again as tax agents.

The AAT refused to set aside the decision to cancel the registrations of Mr B and C Ltd. The AAT was satisfied that C Ltd’s lodgment and payment defaults, for which Mr B was responsible, were neither isolated nor a consequence of “aberrant exigency” and rejected his submission that those defaults were attributable to his employees and financial exigency. Indeed, the defaults gave rise to the impression of Mr B’s “disregard of the importance of timely lodgement compliance” by C Ltd. The AAT put it this way.

  1. In the present matter I have found that Mr Birdseye’s failures in relation to the lodgement and payment defaults are inconsistent with contemporary satisfaction of his fitness for registration. I made that finding because of the intrinsic importance of taxation law compliance by a tax agent, because of his history of apparently similar defaults, because of the recency of the defaults (at the time of the Board’s decision) and because of my inability to accept Mr Birdseye’s explanatory exegesis attributing those defaults to his employees and to financial exigency.
  2. The conduct deficiency I have found is significant. 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 (and that period has no certain end point). In my view that loss adequately addresses two of what I regard as the three primary purposes of the TASA preclusion period discretion.

Certain allegations relied on by the TPB to cancel the registrations were rejected by the AAT, including that Mr B had failed to take reasonable care to ensure compliance with taxation laws and that Mr B and C Ltd had failed to provide tax agent services competently. The AAT also rejected an allegation that Mr B’s dealings with the ATO were unprofessional and unco-operative, although the evidence showed a “degree of disdain” for the competence of some of the ATO audit personnel.

Mr B and C Ltd did have one victory – the AAT set aside the 5-year ban on applying to be registered again, as the ban was primarily influenced by factors which were found to be unsubstantiated or were abandoned by the TPB.

CATCHWORDS

TAX AGENTS – tax agent registration termination – whether applicants breached the Code of Professional Conduct – acting honestly and with integrity – conduct of personal affairs – competent provision of tax agent services – whether applicant is a fit and proper person – lodgement and payment defaults – decisions under review affirmed

TAX AGENTS – re-application determination – applicants ineligible to re-apply for registration for five year period – maximum ineligibility period – consideration of purpose of registration preclusion period – decisions under review set aside and substituted

(Birdseye vTax Practitioners Board [2021] AATA 1011, AAT, Taylor SM, 20 April 2021.)

[29.4.21; LTN 80, 29/4/21]

 

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