The AAT has confirmed a TPB decision to terminate a tax agent’s registration, because it considered he did not have the ability to do all that was required of him.
The applicant has about 840 clients, of whom 95% require tax returns to be prepared. He does virtually all the work himself. He is also the primary carer for his mother and suffers from health conditions requiring intensive treatment and daily monitoring.
In October 2015, the Tax Practitioners Board (TPB) decided to terminate his registration as a tax agent on the basis of alleged breaches of the Tax Agent Services Act 2009 (the TAS Act):
- failure to lodge by the due date his own tax returns and BASs over a 4-5 year period – the returns and BASs were all eventually lodged in November 2015 (one month after his registration was terminated);
- failure to lodge, by the due date, 7 monthly BASs on behalf of a client;
- failure to maintain professional indemnity insurance for almost 12 months; and
- failure to communicate with the TPB about the insurance and the alleged breaches of the TAS Act.
In addition, he incurred a personal tax debt of $11,162 in 2016 which he agred to pay in $440 fortnightly instalments. However, he failed to make all due payments. He also allegedly failed to cooperate with the ATO.
The AAT has now confirmed the TPB’s decision, although delaying its implementation until 1 March 2018.
The AAT did not question the applicant’s honesty or knowledge, but concluded that he did not have the “ability to do what he should have been doing as a tax agent”. The AAT said that he “has to be directed to do what is required of him and directed consistently to do so”. The fact the applicant had acknowledged many of his failings, had taken steps to address them and had health issues did not sway the AAT.
(Peterson and Tax Practitioners Board  AATA 93 (AAT, Forgie DP, File No: 2015/6018, 31 January 2018.)
[LTN 39, 27/2/18; Tax Month February 2018]
Study questions (answers below*)
- Was the tax agent’s registration cancelled?
- Did he do virtually all the work himself, whilst being the primary carer for his mother?
- Did he get all his own returns lodged just before the TPB’s decision?
- Were lack of honesty, and competency, contributing factors in the AAT’s decision?