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The Administrative Appeals Tribunal has set aside a decision of the Tax Practitioners Board to terminate a tax agent’s registration on the ground that he had ceased to meet the tax practitioner registration requirement that he must be a fit and proper person. The Tribunal found, on the evidence, that the tax agent was a fit and proper person under the Tax Agent Services Act 2009 (TAS Act) for registration as a tax agent.

The tax agent had failed to lodge his own tax returns for the 2009 and 2010 years by the due dates, and had failed to lodge BASs for the reporting periods ending 30 June 2010 through to 30 June 2011 by the respective due dates. He was convicted in a Magistrates Court of offences under s 8C(1)(a) of the Taxation Administration Act 1953. The ATO obtained a default judgment against him for an outstanding tax liability and, as a result of the unsatisfied judgment, the tax agent was issued with a bankruptcy notice.

In its decision, the Board determined that the tax agent was in breach of the Code of Professional Conduct in the TAS Act, in that he did not comply with the taxation laws in the conduct of his personal affairs and also that he was not a fit and proper person as required for registration. However, the decision to terminate his registration was based solely on the ground that he had “ceased to meet the tax practitioner registration requirement that [he] must be a fit and proper person”.

By the time of the Tribunal hearing, all outstanding returns and BASs had been lodged, albeit some of them after the agreed lodgment dates, and the tax liability had been discharged, as had the bankruptcy notice.

The tax agent was able to satisfy the Tribunal that his difficulties with lodgment and payment arose from a depressive illness caused by personal problems, and also by structural changes to his practice. On the other hand, there was evidence that he had had a continuous unblemished practice as a tax agent for some 30 years.

In all the circumstances, the Tribunal decided that the tax agent remained a fit and proper person under the Act and that the public interest did not require that he be denied the right to hold himself out as such in his capacity of a tax agent. Neither a formal warning nor supervision in his practice would be necessary.

Re Harris and the Tax Practitioners Board [2014] AATA 430 (R G Kenny SM, 1 July 2014).

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