The Tax Practitioners Board has stepped up its investigations into tax agents suspected of high-risk behaviour and it has terminated a number of registrations in recent months.
In July the TPB reported that it was investigating more than 350 tax practitioners suspected to high risk behaviour. Some of the issues that gave rise to the investigations include failure to meet personal tax obligations, over-claiming work related expenses on behalf of clients, black economy activity, non-lodgement of annual declarations and non-compliance with continuing professional education requirements.
Also last month, the Administrative Appeals Tribunal supported a TPB decision to terminate Immanuel Shmuel’s tax agent registration and impose a period of 12 months during which he could not re-apply for registration.
Shmuel failed to meet a fit and proper person test after he failed to comply with his personal tax obligations, made false and misleading statements in his annual declaration to the TPB.
He failed to notify the TPB of his bankruptcy notice (a result of $109,000 of outstanding tax liabilities) and a guilty plea to a criminal charge involving dishonesty.
The AAT affirmed that a tax agent is expected to uphold a higher standard of care than the general public in relation to personal tax obligations. Failure in this respect raises serious doubts about the practitioner’s capacity to handle other people’s tax affairs.
In another matter, which led to an arrest earlier this month, the TPB worked with the tax office and police to investigate an unregistered tax agent targeting the backpacker community.
Clients provided their MyGov details and later discovered their refunds were paid into the unregistered agent’s bank account. In many cases, work-related expenses were significantly overstated.
In another case a tax agent was investigated by ASIC for vote rigging in an company board election. No conviction was recorded but the agent was fined and put on a good behaviour bond.
agent did not notify the TPB of this matter and his registration was terminated
in May. An appeal to the AAT was unsuccessful.