AAT upholds tax agent termination over unpaid tax debts
The AAT has affirmed a decision by the TPB to terminate a tax practitioner’s registration due to significant personal tax debts and overdue tax returns.
The Administrative Appeals Tribunal has confirmed a decision by the Tax Practitioners Board to terminate the registration of a tax agent and a company after the agent was found to have failed to comply with taxation laws.
The tax agent had worked more than 40 years as an accountant and tax agent and had outstanding tax obligations that were numerous and longstanding, extending back as far as 2014.
The AAT noted that the outstanding obligations involved serious matters that included not lodging income tax returns over many years and significant tax debts. Some of these tax debts had been written off as uneconomical to pursue by the ATO.
“They are, taken as a whole, very serious even to an ordinary taxpayer let alone to a tax agent,” the AAT said.
The applicant had numerous outstanding BAS lodgements, outstanding tax returns for various trusts and three outstanding income tax returns.
In its decision, the AAT said it was difficult to conceive that such serious matters could have readily been forgotten regardless of the personal circumstances of the time.
Tribunal member Rob Reitano accepted that the applicant had failed to respond.
The applicant in the case said various ongoing health issues had prevented him from responding to the TPB’s requests for more information.
Reitano noted that the applicant was not sick for the entire period over which the board was making enquiries.
“He had very many opportunities, not simply to respond in a timely way, but also in doing so to answer the Board’s questions,” Reitano said.
The tribunal stated that the failure by a tax agent, without any reasonable explanation, to comply with taxation laws in their own affairs also “demonstrates a lack of fitness to be a tax agent”.
“The public may well ask rhetorically, ‘if he cannot attend to his own lawful obligations, how can he be a fit and proper person to attend to the tax affairs of others?’ That approach has been consistently applied by the Tribunal,” Reitano said.
The tribunal member also rejected the suggestion that the reason the applicant did not have his tax affairs up to date lay solely in his health issues for several years.
“The evidence does not support a conclusion that the health issues existed since 2014 when the applicant first defaulted in compliance with his obligations,” he said.
“Nor is there much evidence that those issues affected anything much before 2022. To the extent that they did exist, the evidence is self-serving, and I am not persuaded by it so far as it is said to have contributed to the Applicant’s failures to comply with tax laws.
“As I have found that the Applicant did not act with honesty and integrity and that he did not conform to tax laws in respect of his personal affairs I do not consider that he is of ‘good fame, integrity and character’. That too suggests he is not a fit and proper person to be a tax agent.”
The AAT affirmed the termination of the tax agent’s registration but varied the decision of the TPB to terminate the registration of the applicant so that such termination will take effect from 27 July 2024 and the applicant may not apply for registration as a tax agent before 26 July 2025.
