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28 Nov 2019 Don’t overlook your own tax affairs!

Madz and Tax Practitioners Board [2019] AATA 4773 

No matter how busy you are with your clients’ tax affairs, don’t overlook your own. This is highlighted by a recent AAT decision (Madz and Tax Practitioners Board [2019] AATA 4773). 

Mr M had been a tax agent for 40 years or so with, it seems, an excellent record. However, his troubles started when he moved office in late 2015. For 57 days after the move he had no telecommunication facilities and then continued to suffer from extremely poor connectivity for at least 3 years. There was also a period when the ATO was sending letters to his previous address (presumably they were not redirected).

Although Mr M managed to handle his clients’ tax affairs, he started to neglect his own. He failed to lodge his personal income tax returns for 2017 and 2018 and from May 2017 he failed to lodge his own BASs. The TPB decided to terminate Mr M’s registration for breaching the Code of Professional Conduct.

The AAT decided that the TPB was justified in doing so. Mr M’s non-compliance was exacerbated by his failure to comply with an Outstanding Lodgment Order issued by the ATO pursuant to s 30-20 of the Code (the ATO had also written letters to Mr M about his outstanding obligations). Indeed, the outstanding returns and BASs had still not been lodged by the date of the AAT hearing.

There was one crumb of comfort for Mr M as the period during which he could not apply for registration was reduced from 18 months to 12 months. This was because he expressed some contrition at the hearing and he had given priority to his clients’ affairs.

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