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Tax agent's registration terminated for lodging hundreds of fraudulent returns

Thursday, October 25, 2012

Tax agent's registration terminated for lodging hundreds of fraudulent returns

On 14 September 2012, the Administrative Appeals Tribunal (AAT) affirmed the termination of Mr Nei Hwa (Peter) Tung’s tax agent registration for preparing and lodging hundreds of fraudulent income tax returns.

The AAT’s decision upholds a decision by the Tax Practitioners Board (TPB) to terminate Mr Tung’s tax agent registration. He cannot apply to re-register with the TPB for three years.

Dale Boucher, Chair of the TPB said, ‘This decision sends a strong warning message to other registered agents. Agents must take reasonable care to check the identity and authority of anyone approaching them to lodge tax returns on behalf of others. We strongly recommend that all tax agents conduct their own proof of identity checks directly with the taxpayers concerned.

'Registered agents are responsible for adhering to the Code of Professional Conduct (Code). If they do not do so the TPB will take action to protect consumers from their behaviour.'

Mr Tung of Fairfield, NSW lodged 346 fraudulent income tax returns. Six people provided the information for the tax returns, who said they were acting on behalf of other taxpayers.

Mr Tung accepted cash payments up-front, receiving up to $70 more than his usual fee for each return. The AAT found that Mr Tung should have made further enquiries regarding the materials he received but deliberately chose not to do so.

The TPB investigated Mr Tung and found he had breached the Code on numerous occasions. It also found, among other things, that Mr Tung had not acted with honesty and integrity. He had failed to take reasonable care in ascertaining his client’s state of affairs and based on these findings, was found not to be a fit and proper person to be a registered tax agent.

Mr Tung was aware that information on the Australian Tax Office portal for particular tax file numbers did not match the information given to him, but he proceeded to lodge the tax returns anyway. He was also aware the tax instalments on the 346 payment summaries were high compared to the taxpayers’ income, but he did not question this. At no stage did Mr Tung question the authenticity of the personal information, payment summaries or bank account details.

Anyone can make a complaint to the TPB if they feel tax agent or BAS services are not being provided to an appropriate standard, or if the agent is not registered.

Visit www.tpb.gov.au for more information on the TPB.