A tax agent was found to have knowingly obstructed the proper administration of taxation laws on multiple occasions and to have continuously failed to comply with their tax obligations not only in their individual capacity but also as a director and trustee of multiple entities.

After completing an investigation, the Board Conduct Committee (BCC) found the tax agent had breached 4 items of the Code of Professional Conduct (Code), being:

• Code item 1 - You must act honestly and with integrity.
• Code item 2 - You must comply with the taxation laws in the conduct of your personal affairs.
• Code item 7 - You must ensure that a tax agent service that you provide, or that is provided on your behalf, is provided competently.
• Code item 11 - You must not knowingly obstruct the proper administration of the taxation laws.

The tax agent, in their individual capacity and as the sole director of 2 entities, lodged multiple income tax returns (ITR) and business activity statements (BAS) containing overstated deductions or credits and/or underdeclared income, which the Australian Taxation Office (ATO) audited and determined they were not entitled to. This resulted in significant tax shortfalls and penalties being applied.

The tax agent also failed to pay multiple tax debts by their due dates, which in his individual capacity amounted to over $1.6 million. They also failed to cause multiple entities, of which they were director, to pay their significant tax debts by their due dates.

The tax agent, in their capacity as a director, failed to cause 2 companies to comply with their superannuation employer obligations, and failed to cause multiple entities to lodge numerous statements to the ATO by their respective due dates.

In addition, as the sole director of a registered tax agent company, the agent was found to have caused the company to engage in conduct that breached multiple items of the Code. This conduct included preparing and lodging an ITR for a client which contained deductions the ATO found the client could provide no substantiation for, and therefore had no entitlement to. The ATO also cancelled another client’s company GST registration after it found the company was not carrying on a business, with the ATO amending 12 quarterly BAS, prepared and lodged by the tax agent company, resulting in a tax shortfall. Another company had GST credits disallowed for 14 quarterly BAS, that were prepared and lodged by the tax agent company, after the ATO found the client did not hold any tax invoices for the reported purchases at the time of lodgement and could otherwise not substantiate the amounts.

Based on this persistent disregard for their obligations under the Code and the determination that they were not a person the Commissioner, clients and the public could have confidence in to perform the functions of a registered tax practitioner honestly and with integrity, the BCC found the tax agent had ceased to meet the registration requirement that they were a fit and proper person. The tax agent’s registration was terminated and a 5-year ban from reapplication for registration was imposed.