Cai and Tax Agents' Board of New South Wales

[2004] AATA 959

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 959

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2004/477

GENERAL ADMINISTRATIVE DIVISION		)
Re		WEI JIE CAI

Applicant

And TAX AGENTS' BOARD OF NEW SOUTH WALES

Respondent

DECISION

Tribunal Ms R Hunt, Senior Member

Date15 September 2004

PlaceSydney

Decision The Tribunal affirms the decision under review.

..............................................

Robin Hunt
  Senior Member

CATCHWORDS

Tax Agent registration - Income Tax Assessment Act 1936 - fit and proper persons to prepare income tax returns – academic qualifications prescribed – applicant not qualified in same manner as prescribed – decision of the Respondent affirmed.

Income Tax Assessment Act 1936, section 251BC

Income Tax Regulations 1936, regulation 156

REASONS FOR DECISION

15 September 2004 Ms R Hunt, Senior Member          

SUMMARY

1.      Mr Wei Jie Cai, the Applicant, sought review of a decision by the Tax Agents’ Board of New South Wales (“TAB”), the Respondent, dated 25 March 2003, declining to register him as a tax agent under the provisions of Part VIIA of the Income Tax Assessment Act 1936 (“the Act”). Mr Cai applied for review on the basis that he had successfully satisfied the academic qualifications in accountancy and it would be unfair to not register him solely on the duration of his studies. The Tribunal affirmed the decision of TAB.

BACKGROUND

2.      Mr Cai holds a Masters degree from the University of Western Sydney in Professional Accounting conferred in April 1998. He also holds a Bachelor of Engineering degree awarded in 1983 by the Shanghai Institute of Mechanical Engineering. The Department of Employment, Education and Training, through NOOSR, assessed this overseas qualification on 22 August 1994 as comparable to an Australian bachelor degree. A transcript shows that Mr Cai studied principles of commercial accounting, advanced mathematics, economics and other subjects as part of his engineering degree as well as various direct engineering studies as well as humanities. In addition, Mr Cai studied in Australia at Burwood Computer College and was awarded certificates and a diploma in Business Studies and various financial and accounting courses in 1991 to 1994. He achieved high distinctions and credits in several subjects. Mr Cai also was admitted to the status of an Associate of the Australian Society of Practising Accountants (CPA) on 1 July 1998, after undertaking a further program of studies.

3. Mr Cai represented himself at the hearing of the Tribunal on 2 September 2004. The documents filed under section 37 of the Administrative Appeals Tribunal Act 1975 and other documentary exhibits handed up by Mr Cai were admitted as part of the evidence. Mr Cai gave oral evidence in support of his case. He told the Tribunal that the reason he was an Associate of the CPA and not a full member was that he was not a registered tax agent. He argued that, as he was a senior accountant with many years of experience and supervised less experienced accountants, who were registered tax agents, and held a University Masters degree, that was superior to a TAFE qualification, it was unfair not to register him for the only reason that his University course was not of the duration specified in the Regulations. Mr Cai repeatedly submitted that he had completed his course in less time than many graduates and that he should not be penalised on this account. He believed he should be registered on the basis that he satisfied regulation 156(1)(c) of the Income Tax Regulations 1936. Nevertheless, for the reasons given below, the Tribunal affirmed the decision under review, finding that Mr Cai had not met the prescribed academic qualifications.

LEGISLATION

2. The provisions of section 251JA of the Act are titled “original registration of tax agents” and require the TAB to register a person as a tax agent if he or she satisfies them that he or she is a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters. However, section 251BC of the Act titled “Fit and proper persons to prepare income tax returns” disqualifies a person from registration if he or she does not meet prescribed qualifications. The necessary qualifications are prescribed in regulation 156 of the Income Tax Regulations 1936.

3.        Regulation 156 reads, in part:

156 (1) for the purposes of subparagraph 251BC(1)(b)(ii) of the Act, the following qualifications are prescribed:

(a) the person:

(i) shall have completed the academic requirements for the award of a degree, diploma or other qualification from an Australian university, college of advanced education or other tertiary institution of an equivalent standard, and have passed examinations in such subjects, under whatever name, which an appropriate authority of the university, college of advanced education or other tertiary institution certifies to the Board to represent a course of study in accountancy of not less than 3 years' duration and in commercial law of not less than 18 months' duration or shall possess such other qualifications as the Board regards as equivalent to those qualifications;

(ii) shall have:

(A) been engaged in relevant employment on a full-time basis for not less than a total of 12 months in the preceding 5 years;

(B) otherwise been engaged in relevant employment to an extent that the Board regards as equivalent to that referred to in sub-subparagraph (A); or

(C) been engaged in such other employment and for such time as the Board regards as equivalent to being engaged in relevant employment as referred to in sub-subparagraph (A); and

(iii) shall have, by written examination, successfully completed a course of study in Australian income tax law acceptable to the Board;

(b) the person:

(i) shall have completed the academic requirements for admission as a barrister or solicitor of the High Court or of the Supreme Court of a State or Territory;

(ii) shall have:

(A) been engaged in relevant employment on a full-time basis for not less than a total of 12 months in the preceding 5 years;

(B) otherwise been engaged in relevant employment to an extent that the Board regards as equivalent to that referred to in sub-subparagraph (A); or

(C) been engaged in such other employment and for such time as the Board regards as equivalent to being engaged in relevant employment as referred to in sub-subparagraph (A);

(iii) shall have, by written examination or examinations set by a college of technical and further education (or an examination or examinations of an equivalent or higher standard), successfully completed a course of study in basic accounting principles; and

(iv) shall have, by written examination, successfully completed a course of study in Australian income tax law acceptable to the Board;

(c) the person:

(i)  shall have completed the academic requirements for the award of a diploma or certificate from a college of technical and further education following a course of study in accountancy of not less than 2 years' duration of full-time study or 4 years' duration of part-time study;

(ii) shall have:

(A) been engaged in relevant employment on a full-time basis for not less than a total of 2 years in the preceding 5 years;

(B) otherwise been engaged in relevant employment to an extent that the Board regards as equivalent to that referred to in sub-subparagraph (A); or

(C) been engaged in such other employment and for such time as the Board regards as equivalent to being engaged in relevant employment as referred to in sub-subparagraph (A); and

(iii) shall have, by written examination, successfully completed a course of study in Australian income tax law acceptable to the Board; or

(d) the person:

(i) shall have:

(A) been engaged in relevant employment on a full-time basis for not less than a total of 8 years in the preceding 10 years;

(B) otherwise been engaged in relevant employment to an extent that the Board regards as equivalent to that referred to in sub-subparagraph (A); or

(C) been engaged in such other employment and for such time as the Board regards as equivalent to being engaged in relevant employment as referred to in sub-subparagraph (A); and

(ii) shall:

(A) be a member of and entitled to vote at meetings of the Australian Society of Accountants, the Institute of Chartered Accountants in Australia or the National Institute of Accountants; or

(B) have, by written examination or examinations set by a college of technical and further education (or an examination or examinations of an equivalent or higher standard), successfully completed a course of study in basic accounting principles and have, by written examination, successfully completed a course of study in Australian income tax law acceptable to the Board.

DISCUSSION OF EVIDENCE

4.        The TAB found that Mr Cai did not satisfy either regulation 156(1)(a) or regulation 156(1)(c) of the Income Tax Regulations 1936 as set out above (T5 p35). The TAB explained  to Mr Cai in a letter dated 16 December 2003 that his transcript did not demonstrate that he had met the requirement under regulation 156(1)(a). The letter went on to say that Mr Cai also did not demonstrate that he met regulation 156(1)(c). The letter suggested he might not satisfy the academic requirement under regulation 156(1)(c) because his transcript showed less than 2 years study. However, he might overcome this if he produced a letter from the University or other evidence that his course was a 2 years full time course and he completed the course in less time. The letter also gave some advice about how he might have his overseas degree assessed by NOOSR or the CPA in order to meet regulation 156(1)(c). The letter raised some other concerns as well and suggested how Mr Cai might deal with them.

5.        In a further letter dated 25 March 2004 (T2 pp5-7), the TAB declined to register Mr Cai because of deficiencies under both regulation 156(1)(a) and regulation 156(1)(c). With this letter were attachments setting out the regulation and other material including “Appendix C” (T2, pp14 & 15). Appendix C summarised the necessary academic qualifications and the alternative for applicants without these academic qualifications.

6.        Mr Cai did not want to argue that he should qualify under regulation 156(1)(a). He told the Tribunal that he still contended that he should qualify under regulation 156(1)(c) because a University course was superior to a TAFE course and he completed his Masters degree more quickly than many students. He did not try to get a letter from the University to say the course was considered a 2 year full time course or equivalent. He simply thought it unfair that his Master’s degree was not recognised as a sufficient qualification for registration as a tax agent. Mr Cai produced his certificates from Burwood Computer College (Exhibit A1) although he gave evidence that this was a private college and not a TAFE college. He also produced the lecture program for his Masters degree (Exhibit A2). This showed that he had studied 13 subjects in completing the course. This record showed that he completed the course in approximately 18 months and had achieved a good academic level. Mr Cai further handed up a NOOSR assessment of his overseas qualifications recognising his Engineering degree (Exhibit A3) and the academic record for this degree (Exhibit A4).

7.        I have considered all the material that Mr Cai has produced and agree with him that he is very well qualified. He has excelled in numerous courses and has been recognised by the CPA to the extent that he is an associate.

8.        However, the legislative requirements are very specific and the Tribunal has no discretion to ignore them. Briefly, under regulation 156(1)(a) and (b), an applicant must have completed a course of study in accountancy of not less than 3 years duration or a course in basic accounting principles associated with the legal profession as well as a course in Australian Income Tax law acceptable to the Board and have relevant experience. Mr Cai does not suggest he qualifies under these provisions and I find that he does not so qualify.

9.        For acceptance under regulation 156(1)(c), an applicant must have completed a course in accountancy of not less than 2 years duration full time or 4 years part time with a  college of technical and further education (TAFE). He or she must also have completed a course of study in Australian Income Tax law acceptable to the Board and have relevant employment for not less than 2 of the preceding 5 years. Mr Cai does not suggest that he every studied with TAFE but argues that a Masters degree produces a better education in accountancy. This may be true but the Tribunal has no discretion to ignore or override the statutory requirements. It follows that the Tribunal must find that, Mr Cai not having studied accountancy at TAFE for 2 years, cannot qualify for registration under regulation 156(1)(c).

10.      As Mr Cai does not satisfy regulation 156(1)(c) or any other option under regulation 156, the Tribunal must affirm the Board’s decision.

DECISION

11.      The Tribunal affirms the decision of the Tax Agents’ Board of New South Wales dated 25 March 2004not to register the Applicant as a registered tax agent.

I certify that the 11 preceding paragraphs are a true copy of the reasons for the decision herein of Ms R Hunt, Senior Member.

Signed:         ………………………………………...

Dates of Hearing2 September 2004

Date of Decision  15 September 2004

Representative for the Applicant     Self Represented

Solicitor for the Respondent            Ms Jodie Maurer, Australian Government Solicitor