A tax agent who, among other breaches of the Code of Conduct, was late with lodging income tax returns and quarterly BASs has had his registration terminated. The TPB terminated the tax agent’s registration as it considered he was no longer a “fit and proper person”.
The tax agent conceded that he had:
- failed to comply with taxation laws in the conduct of his personal affairs – he lodged 3 annual income tax returns and 10 quarterly BASs (spanning a 3-year period) after the due date (also failing to comply with a TPB order to get his affairs in order);
- failed to comply with an instalment plan to pay outstanding tax liabilities – this also constituted a breach of an AAT order staying the TPB’s original decision to terminate his registration;
- not maintained the knowledge and skills relevant to the tax agent services that he provided; and
- not responded to requests and directions from the TPB in a timely, responsible and reasonable manner.
In the AAT’s view, these breaches of the Code of Conduct were sufficient to justify a conclusion that the tax agent was no longer a “fit and proper person”. Further, the termination of his registration was an appropriate sanction, notwithstanding his personal issues (these included “battles with depression and his wife’s treatment for cancer”).
(Worsley v Tax Practitioners Board [2022] AATA 3742, AAT, Kirk SM, 4 November 2022.)
[EDITORIAL COMMENT – The TPB takes pride in weeding out the ‘bad eggs’ but carries ‘lead in its saddle’, in terms of independence, from the ATO, by operating out of the ATO’s offices, and being overwhelmingly staffed, by ATO staff on secondment, or ex-ATO staff. There is a feeling amongst agents, that the ATO is getting the TPB to do their dirty work, by adding de-registration leverage, to what should be their job, of policing compliance, as they would, with non-agent taxpayers. I’m sure that both the ATO and the TPB would reject these characterisations, but independence (like justice, more generally) needs to be ‘seen to be done’ as well as being actually being dispensed – and the feeling amongst agents persists.
I’ve learnt, too, that it is hard to get a sense of the merits of a case, just from what is reported, in a contested case – especially, as the TPB is publicly funded, and a professional investigator and respondent to such appeals, whilst the Applicant agent was (as here) self-represented. The agent pleaded extenuating circumstances, including: floods, bushfires, depression and his partner’s health issues. The outstanding ITX obligations appeared small ($1k) and the ICA obligations were more ($55k) but not huge. It seems, however, that the non-compliance went on for longer than the extenuating circumstances did, or they did not, otherwise justify the non-compliance. The TPB found that the non-compliance amounted to not being a ‘fit and proper person’, which they could be, but this requires some more nuanced tests. The Tribunal upheld this ‘fit and proper’ finding, and it upheld the TPB’s decision to terminate the agent’s registration (despite them not explaining why they did not apply one of the lesser functions). I looked to see ‘how long he was rubbed out for’ (the period before which he could not reapply, for registration) but could not see it in the report.]
[Tax Month – November 2022 – Previous Month, 12.11.22]