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Supervising tax agent fails to provide supervision and control for multiple entities

Supervising tax agent fails to provide supervision and control for multiple entities

The Board Conduct Committee (BCC) considered the conduct of a tax agent and found they had breached multiple items in the Code of Professional Conduct (Code). 

The tax agent was the sole supervising agent for multiple entities. Due to personal reasons, the tax agent was unable to work for a period of time. During this time, entities they supervised lodged approximately 750 income tax returns (ITRs) without the tax agent’s supervision and control. The Tax Practitioners Board (TPB) attempted to contact the tax agent on multiple occasions for an explanation as to how they were providing supervision and control in their role as a supervising agent. The tax agent failed to properly respond to the TPB, even after being granted multiple extensions and opportunities to respond. 

Consequently, the BCC found that the tax agent breached Code item 7, as they failed to ensure the tax agent services they provided, or that were provided on their behalf, were provided competently. They also breached Code item 14 by failing to respond to requests from the Board in a timely, responsible and reasonable manner. 

The tax agent also had outstanding personal tax obligations that had accumulated over several years. The tax agent had breached Code item 2 by failing to:

  • lodge their ITRs by their respective due dates
  • lodge their quarterly business activity statements (BAS) by their respective due dates
  • lodge, in their capacity as partner, the partnership’s ITRs by their respective due dates
  • fully comply with a Notice under Section 60-100 of the Tax Agent Services Act 2009 (which is a notice that gives the TPB the power to request information, documents or things) by its due date.

Despite being made aware of their outstanding personal tax obligations, the tax agent did not take action to rectify the issue. 

The tax agent also breached Code item 1 by failing to act with honesty and integrity. The tax agent made false statements to the TPB in multiple annual declarations, stating they did not have overdue personal tax obligations when they did. Additionally, they made a false statement in their renewal application, claiming they and their associated entities did not have overdue tax obligations when in fact they had outstanding ITRs and BAS. 

Based on the conduct, the BCC determined the tax agent did not meet the registration requirement that they are a fit and proper person. As the tax agent did not meet a registration requirement, the BCC terminated their tax agent registration. As a result, the tax agent’s partnership registrations were also terminated as the partnerships no longer met the registration requirement that each partner was a fit and proper person.

 

Last modified: 5 November 2021