Federal court brings bogus tax agent to heel
Would you have an operation if you knew the surgeon had no medical qualifications? Would you get into a taxi if you knew the driver of the car didn’t have a driver’s licence?
Not many of us would, but every year thousands of Australians entrust their personal tax returns to bogus individuals posing as tax practitioners, most of whom possess no qualifications or experience to do the work.
With the tax-time landscape being even more complicated in 2020 due to the impact of the global pandemic, the Tax Practitioners Board (TPB) is urging taxpayers to ensure that their tax practitioner is registered by checking the online public register at tpb.gov.au/onlineregister.
It’s a free and easy to use resource, and one that could potentially save taxpayers thousands in penalties and additional fees.
It follows a recent case of Brisbane based, Kent Scott Hacker and his associated companies One Stop Global Staffing Pty Ltd (OSGS) and Naleview Pty Limited.
- In November 2018 the ATO raided the offices of OSGS and discovered evidence indicating that Mr Hacker’s business, OSGS, had been preparing and lodging income tax returns unlawfully for thousands of taxpayers. Mr Hacker had kept records of the taxpayers’ personal details including their date of birth, tax file number and bank account details.
- The TPB began investigating the matter and in February 2019 brought proceedings before the Federal Court seeking both civil penalties and an interim injunction. Following this Mr Hacker and his companies gave an undertaking to the court that they would cease their activity.
- Despite this undertaking, and a later court order to display large notices at the OSGS office warning taxpayers of the risk of using Mr Hacker’s services, Mr Hacker carried on providing tax agent services, often to unsuspecting clients.
On 27 July 2020 the Federal Court delivered two judgements, finding that Mr Hacker and his businesses had contravened the Tax Agent Services Act 2009 on numerous occasions and were in contempt of court by providing tax agent services after undertaking to the court that they would not do so.
Chair of the TPB, Mr Ian Klug, AM said, ‘It is quite extraordinary that each time Mr Hacker admitted to being in contempt of court, he went on to unlawfully lodge additional income tax returns for clients.’
‘We would urge anyone paying for tax agent services, particularly during this tax-time, to be suspicious of the promise of large tax refunds and check the TPB register to ensure the legitimacy of their agent’s registration.’
He continued, ‘Never share your myGov password with anyone as doing so puts your personal and financial information at risk.’
The Court will hold a further hearing on 28 September 2020 to decide on penalties. Mr Klug is looking forward to the Court imposing an appropriate penalty, reflective of the scale of Mr Hacker’s unlawful conduct. ‘The right decision will not only address Mr Hacker’s misconduct, but it will strengthen the integrity of our tax system by sending a strong deterrence message to other rogue advisers’.
About the Tax Practitioners Board:
The Tax Practitioners Board 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. Follow us on Twitter @TPB_gov_au, Facebook and LinkedIn