On 18.2.22, the AAT upheld a TPB decision to terminate a tax agent’s registration and impose a 5-year ban on him re-applying for registration.
The facts were theres.
- Mr P, in partnership with his wife, provided bookkeeping, accounting and taxation services.
- Following an investigation, the TPB terminated Mr P’s registration on the basis that he was no longer a “fit and proper person” to be registered.
- The TPB also imposed a 5-year ban on him re-applying for registration.
The AAT has upheld the TPB’s decision, concluding that Mr P, as a partner and as the sole supervising agent for the partnership:
- allowed the partnership to misappropriate funds belonging to a client (Dr C) without the client’s authority. The funds were allegedly used to:
- pay the partnership’s accounts with the ATO and
- to make various loans to the partnership and close family members of Mr and Mrs P; and
- failed to adequately manage the conflict of interest between the partnership and Dr C, in particular by failing to put in place loan agreements and making sure proper records were kept in relation to transactions between Dr C and the partnership or close family members of Mr and Mrs P.
- Further allegations – that Mr P had allowed the partnership to breach its taxation obligations by failing to lodge various tax returns and BAS on time and pay taxation debts – were admitted by him at the commencement of the AAT hearing.
The length of the ban imposed on Mr P – the AAT decided not to reduce the 5 year ban, commenting that
- the unauthorised payments “involved a serious form of dishonesty”, which “occurred on [Mr P’s] watch in a small partnership where there were only two partners”.
- Mr P’s failure to regularise the partnership’s own tax affairs by the time of the hearing and to understand his obligations, so far as conflicts of interest and managing them were concerned, were also significant.
(Plaskitt and Tax Practitioners Board [2022] AATA 267, AAT, Reitano M, 18 February 2022.)
[Tax Month – March 2022 – Previous Month, 15.3.22] [LTN 37, 25/2/22]