Following a tax agent’s deregistration for making false or misleading statements in breach of s 50-20 of the Tax Agent Services Act 2009 (the TASA), the Federal Court has now imposed a civil penalty of $3,000 for false certification of the returns and $2,000 for the false information contained within them, but reduced the penalty to $4,000 on account of his co-operation in eventually admitting his wrongdoing.

The tax agent’s registration was cancelled following an investigation by Tax Practitioners Board which found he had made false and misleading statement in preparing 79 returns – albeit, the tax agent had allegedly been duped by an agent said to be acting on behalf of 79 taxpayers who provided false information in respect of the making of the returns. However, it was found that the tax agent had been reckless in not checking the Tax Agent’s Portal to confirm the correctness of information.

In determining the amount of the penalty to be imposed, the Court first noted that the penalty must be proportionate to the wrong and must also operate as a deterrent to the tax agent himself and other registered tax agents. In arriving at it decision, the Court took into account a range of matters, including: the nature of the contravening conduct, the loss caused, personal matters and his co-operation. In doing so, it rejected the Board’s proposed penalty of $222,976 and said that the penalty reflected “the lower level of wrongdoing”.

(Tax Practitioners Board v Kim (No 2) [2015] FCA 263, Federal Court, Perram J, 27 March 2015.)

[LTN 61, 31/3/15] [IT 31/3/15]