The AAT has found that a tax agent was a fit and proper person to continue to be registered as an agent, despite the Tax Practitioners Board finding otherwise.
The applicant had been a registered tax agent since 1984, first under the now repealed provisions in the ITAA 1936 and then under the Tax Agent Services Act 2009. In February 2012, he was convicted in the Townsville Magistrates Court of offences under the TAA of failing to lodge income tax returns and BASs on time. The Tax Practitioners Board investigated and held that the agent had failed to comply with s 30-10(2) of the Code and, as he had ceased to meet one of the registration requirements, he was no longer a “fit and proper person” within the meaning of the Act. This was on the basis that he was not of good fame, integrity and character because he failed to comply with his own taxation obligations and with the orders of the Townsville Magistrates Court under s 8G of the TAA.
The agent gave evidence that, due to a range of factors (eg suicide death of his son, death of a close cousin, death of his aunt, who worked in the accountancy practice, exit of his brother from the practice causing large increase in his workloads, and damage to clients’ records due to flooding from a cyclone, etc), he was being treated for depression and fatigue and this affected his professional work. The Tribunal reviewed the evidence and concluded that the agent remained a fit and proper person under the Act and that “the public interest does not require that he be denied the right to hold himself out as such in his capacity of a tax agent”.
(AAT Case [2014] AATA 430, Re Harris and FCT, AAT, Kenny SM, AAT Ref: 2013/2283, 1 July 2014.)
[LTN 126, 3/7/14]
Extract from s20-10 of TASA
The Code of Professional Conduct
Honesty and integrity
(1) You must act honestly and with integrity.
(2) You must comply with the * taxation laws in the conduct of your personal affairs.
(3) If:
(a) you receive money or other property from or on behalf of a client; and
(b) you hold the money or other property on trust;
you must account to your client for the money or other property.
Independence
(4) You must act lawfully in the best interests of your client.
(5) You must have in place adequate arrangements for the management of conflicts of interest that may arise in relation to the activities that you undertake in the capacity of a * registered tax agent or BAS agent.
Confidentiality
(6) Unless you have a legal duty to do so, you must not disclose any information relating to a client’s affairs to a third party without your client’s permission.
Competence
(7) You must ensure that a * tax agent service that you provide, or that is provided on your behalf, is provided competently.
(8) You must maintain knowledge and skills relevant to the * tax agent services that you provide.
(9) You must take reasonable care in ascertaining a client’s state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement you are making or a thing you are doing on behalf of the client.
(10) You must take reasonable care to ensure that * taxation laws are applied correctly to the circumstances in relation to which you are providing advice to a client.
Other responsibilities
(11) You must not knowingly obstruct the proper administration of the * taxation laws.
(12) You must advise your client of the client’s rights and obligations under the * taxation laws that are materially related to the * tax agent services you provide.
(13) You must maintain professional indemnity insurance that meets the Board‘s requirements.
(14) You must respond to requests and directions from the Board in a timely, responsible and reasonable manner.