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$900,000 penalty for unregistered tax agents

Monday, May 18, 2015

$900,000 penalty for unregistered tax agents

The Federal Court of Australia has ordered Mr Peter Kolya to pay a $150,000 penalty and his company, HP Kolya Pty Ltd, to pay a $750,000 penalty for breaches of the Tax Agent Services Act 2009 (TASA). This is the largest penalty imposed for breaches of the TASA.

Mr Kolya and his company were not registered tax agents or BAS agents, however from August 2011 until August 2013, Mr Kolya and his company prepared and lodged numerous income tax returns and business activity statements, made amendments to tax returns, and charged fees for these services. 

Mr Kolya and the company also contravened the TASA by advertising the provision of tax agent services. 

The Court imposed a 10 year injunction on Mr Kolya and his company, in which they are not allowed to provide or advertise tax agent services or BAS services.

In deciding the appropriate penalty, Justice Foster took into account the evidence submitted by the TPB, which showed Mr Kolya:

  • “knew that the pleaded conduct was in breach of the TAS Act
  • knew that he was engaging in conduct which he had been prohibited from undertaking by various decisions of courts and tribunals 
  • was well aware of the likely harm his continued conduct of his business was likely to cause
  • has never shown any contrition whatsoever for the pleaded conduct and appears to have no appreciation of its seriousness.”

Justice Foster noted that Mr Kolya’s conduct “displayed a flagrant disregard for the relevant registration requirements under the TASA”, and stated that the case required a strong response from the Court both to deter Mr Kolya and to “make clear to others who may be minded to replicate his conduct that they should think very carefully before doing so because the penalties which will be imposed if caught will be significant.”

The TPB encourages anyone seeking the services of a tax agent to prepare and lodge their tax returns, to first check that the person is registered with the TPB to provide those services, at www.tpb.gov.au/onlineregister

Further information about the Tax Practitioners Board
The TPB regulates tax practitioners in order to protect consumers. The TPB aims to assure the community that tax practitioners meet appropriate standards of professional and ethical conduct.

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