The Federal Court has held that a tax agent had breached the Tax Agent Services Act 2009 (TASA) by recklessly making statements to the Commissioner that were false, incorrect or misleading, although it did not impose a pecuniary penalty.

  • Between August and September 2011, the registered tax agent prepared and lodged 90 individual income tax returns based on information he received from 2 people representing themselves as personnel from a recruitment agency.
  • The Court said the agent did not have any dealings with the individual taxpayers, and did not seek any declarations from them stating that the information provided to him was true and correct.
  • He did not take any steps to verify any of the information supplied to him, even though he had access to the Tax Agent Portal to check payment summaries and taxpayer information.

The Tax Practitioners Board terminated the agent’s registration in August 2013 and banned him from reapplying for registration for 3 years. In the current matter, the Board sought 2 declarations against, and the imposition of, a pecuniary penalty on the agent in respect of contraventions of s 50-20 of the TASA.

The Federal Court took into consideration the agent’s personal circumstances, including the fact that he had lost his livelihood, and did not impose a pecuniary penalty.

(Tax Practitioners Board v Li [2015] FCA 233, Federal Court, Edmonds J, 17 March 2015)

[LTN 53, 19/3/15]

Section 50-20 of TASA

You contravene this section if:

(a)    you are a *registered tax agent or BAS agent; and

(b)   you:

(i)    make a statement to the Commissioner; or

(ii)   prepare a statement that you know, or ought reasonably to know, is likely to be made to the Commissioner by an entity; or

(iii) permit or direct an entity to do a thing mentioned in subparagraph (i) or (ii); and

(c)    you know, or are reckless as to whether, the statement:

(i)    is false, incorrect or misleading in a material particular; or

(ii)   omits any matter or thing without which the statement is misleading in a material respect.

Civil penalty:

(a) for an individual – 250 penalty units; and

(b) for a body corporate – 1,250 penalty units.