Company slapped with termination for ‘shocking, fraudulent activity’
The Tax Practitioners Board revealed the “egregious conduct” of a tax agent company has led to its termination for a maximum of five years.
The Tax Practitioners Board has terminated a registered tax agent company based on one of its directors, revealed to not be a registered tax practitioner.
The TPB said the maximum banning of five years comes after the actions of the director and company were found to have breached code items one and four.
The breaches of code items one and four include:
- Failing to act lawfully and honestly by using clients’ information on their system to create 51 false entities without their knowledge and authorisation.
- Lodging over 70 fraudulent business activity statements to obtain GST refunds of $279,878.50 which was deposited into bank accounts they controlled.
- Lodging a further 36 business activity statements which resulted in GST refunds totalling $559,052 being stopped by the ATO.
In addition to the breaches of the unregistered tax agent, the company’s co-director was found to have breached code item seven, according to the TPB.
The co-director breached code item seven by failing to:
- Have adequate structures, processes, supervision and control arrangements in place to ensure accurate and competent tax services were provided.
- Supervise or conduct due diligence on services provided by a director.
The TPB said the significance of the misconduct required both general and specific deterrence, which is why the company had its registration terminated with the maximum five-year ban applied.
“While the tax agent was not involved with the fraud, they should have taken steps to ensure the services provided by the co-director of their company had been provided competently,” the TPB said.
“In this case, wilful blindness to fraudulent activity has not gone unpunished and the tax agent was sanctioned with an order to complete a course of education within three months.”
The TPB has reminded all tax practitioners to be aware that failures of judgement will be met by appropriate sanctions to protect the integrity of the tax profession and tax system.
About the author
