In a decision handed down on Tue 12.11.2013, the Federal Court has imposed a monetary penalty totalling $32,000 on a man for providing tax agent services while unregistered and for advertising those services.
The Court said the man holds degrees in Commerce and Economics and during the 1990s, was employed in accounting firms and qualified as a chartered accountant. In 2009, while working as a process worker, the Court said the man “wanted to discover ways of helping fellow workers by providing them with taxation assistance”. Eventually, he commenced to offer assistance in preparing and filing tax returns, including advice as to allowable deductions. He also hoped to earn income from this activity. His provision of such services constituted contraventions of s50-5 of the Tax Agents Services Act 2009. He circulated leaflets, advertising his services and also distributed his business card. In his leaflets, the man (described as a “tax guru”, the Court said) claimed that he could obtain deductions of up to $3,000. The distribution of these leaflets constitutes the contraventions of s 50-10(1).
The Board alleged the man had contravened ss 50-5(1) and 50-10(1) of the Tax Agent Services Act 2009 and sought declaratory and injunctive relief, pecuniary penalties and costs. The Court said the man admitted 25 contraventions of s 50-5(1), and 2 contraventions of s 50-10(1). The man consented to the making of declarations and the grant of injunctions, and the Court was required to set the amount of any pecuniary penalty.
After reviewing the circumstances of the case, including the man’s poor financial position, the fact he suffers from depression, his co-operation with the Board, and his contrition, the Federal Court imposed a penalty of id=”mce_marker”,200 in respect of each contravention of s 50-5 and a further penalty of id=”mce_marker”,000 for each contravention of s 50-10, a total penalty of $32,000. The Court said the parties agreed that the man should be permitted to pay any penalty in instalments over a 3-year period.
(Tax Practitioners Board v Hinckfuss [2013] FCA 1168, Federal Court, Dowsett J, 12 November 2013.)
[LTN 219, 12/11/13]