Cameron and Tax Agents' Board of Western Australia

[2009] AATA 688

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 688

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/0097

GENERAL ADMINISTRATIVE DIVISION		)
Re		KEGAN CAMERON

Applicant

And TAX AGENTS' BOARD OF WESTERN AUSTRALIA  

Respondent

DECISION

Tribunal   Mr A Sweidan, Senior Member  

Date  5 August 2009

Date of Written Reasons 7 September 2009

Place  Perth

1.  At the conclusion of the hearing of this application on 5 August 2009, the terms of the decision intended to be made and the reasons for that decision were stated orally by the Tribunal.

2.  On 17 August 2009 the respondent requested the Tribunal to furnish to it a statement in writing of the Tribunal’s reasons for its decision.

3.  The oral reasons for decision have been transcribed by Auscript Australasia Pty Ltd.       

4.  A copy of the reasons is attached and is forwarded to the applicant and to the respondent as the reasons for the Tribunal’s decision.

...(sgd) Mr A Sweidan...................

Senior Member

CATCHWORDS

Tax Agents – whether applicant’s qualifications met registration requirements – decision under review affirmed

LEGISLATION

Income Tax Assessment Act 1936 Part VIIA, ss 251KC(1), 251BC(1), s251BC(1)(b), 251BC(1)(b)(ii),

Taxation Laws Amendment Act (No. 2) 1988 s 39

Income Tax Regulations 1936 Part 9, 156(2), 156(3), 156(4), 156(5), 156(2)(d)

CASES

Re Dainty and Minister for Immigration and Ethnic Affairs (1987) 6 AAR 259

REASONS FOR DECISION

7 September 2009	Mr A Sweidan, Senior Member
Background

1.      The applicant, Mr Kegan Cameron, seeks a review by this Tribunal of the respondent’s decision not to register him as a nominee of a tax agent under the relevant statutory provisions.

Relevant Legislation

2.      The Income Tax Assessment Act 1936 ("the ITAA 1936") provides in Part VIIA for the Registration of Tax Agents. The present application is for registration as a nominee of a tax agent under Division 4. By s251KC(1) of the ITAA 1936:

The Board shall register or re-register the proposed nominee as a nominee of the tax agent for the purposes of this Part if the Board is satisfied that the proposed nominee is a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters.

3. Section 251BC(1) of the ITAA 1936 provides that a person is not a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters, as at a particular time, if that person comes under one of the criteria there set out including, in s251BC(1)(b) of the ITAA 1936: i.e. both of the following conditions are satisfied:

(i)the person was not registered as a tax agent, or as a nominee, for the purposes of this Part immediately before the commencement of section 39 of the Taxation Laws Amendment Act (No. 2) 1988 ;

(ii)the person does not hold such qualifications (whether academic, by way of experience or otherwise) as are prescribed;

4. Matters relating to the registration of tax agents are found in Part 9 of the Income Tax Regulations 1936. The prescribed qualifications for the purposes of s251BC(1)(b)(ii) of the ITAA 1936 are set out in Regulation 156 sub‑regulations (2), (3), (4) and (5). Regulation 156(2) is the relevant regulation for the applicant.

5.      The requirements set out in paragraphs (a), (b), (c) and (d) of Regulation 156(2) are cumulative.  To satisfy the qualification the person must comply with the requirements of each paragraph.

6.      Regulation 156(2)(d) provides that a person must have:

successfully completed a course of study in Australian income tax law that is acceptable to the Board.

The Guidelines

7. The Tax Agents' Boards for each of the States of Australia established under Part VIIA of the ITAA 1936 have jointly issued national guidelines entitled "Guidelines - Course of Study in Australian income tax law" for the purpose of providing a nationally consistent approach to the acceptability of what is "a course of study in Australian income tax law" for the purposes of Regulation 156(2)(d) ("the Guidelines"). The Guidelines have been developed as part of a series of guidelines designed to assist educational institutions, students, professional associations and the wider community to understand the factors that provide the basis for the Tax Agents’ Boards’ decisions and to provide a nationally consistent approach to the acceptability of a course of study in:

(a)      Australian income tax law;

(b)      Accountancy;

(c)       Basic accounting principles.

8.      The Guidelines contain a number of factors the respondent will consider in determining the acceptability of a course of study in Australian income tax law. In making a decision on the acceptability of such a course of study, the respondent does not treat any single factor, such as the duration of the course of study, as determinative. What an applicant for registration is required to establish is that the course of study will involve the applicant acquiring, to an acceptable standard, knowledge, skills and understanding, of income tax ranging over:

(a)the rules and principles of Australian tax law;

(b)the procedures of the Australian tax system; and

(c)ethics and the professional responsibility of tax agents.

9.      It is the view of the respondent, as reflected in the Guidelines, that a course of study in Australian income tax law could not adequately develop the knowledge, skills and understanding considered by the respondent to be acceptable for registration as a tax agent in anything less then the equivalent of two academic semesters of study in Australian income tax law.

10.     At the time of the respondent’s decision to refuse Mr Cameron’s registration as an additional nominee, the Guidelines provided, inter alia, that an acceptable course of study in Australian income tax law would require approximately 216 hours for a candidate to complete (based on what would be expected in two academic semesters). The Guidelines further provide and the respondent accepts that this requirement may be met by the accumulation of hours of study undertaken through academic institutions and professional organisations). While the specific reference to the course requiring 216 hours for a candidate to complete has been removed from the current version of the Guidelines, the requirement that the course of study represent the equivalent of two academic semesters of study remains for the reasons set out above.

11.     The Guidelines are policy guidelines which have been developed and endorsed by all of the State Tax Agents' Boards and as such are not binding on the Tribunal.  However, the Tribunal will usually apply policy guidelines unless there are cogent reasons in a particular case not to do so: Re Dainty and Minister for Immigration and Ethnic Affairs (1987) 6 AAR 259 per Davies J at page 267.

12.     In the present case the Tribunal is of the view that there is no material before the Tribunal to indicate that the Guidelines should not be applied.  Further, there are strong reasons for the Tribunal not to depart from the Guidelines.  The Guidelines have been endorsed by the Tax Agents Boards of all the States and were developed by an advisory panel consisting of Board members and academics with extensive backgrounds and experience in taxation law.  Not to apply the Guidelines in the present case could in the view of the Tribunal introduce an undesirable inconsistency into the application of the registration requirements of the legislation.

The Applicant's Academic Qualifications

13.     The applicant’s academic qualifications are set out in his application.

14.     The applicant has presented evidence that he is a member of a professional organisation - CPA Australia.

15.     The applicant's completion of the 2 CPA units (CPA 105 Taxation and CPA 110 Personal Financial Planning and Superannuation) relied upon by him do not meet the required total for a course of study in Australian income tax law within the terms of the Guidelines. The CPA 105 Taxation unit is accepted by the Respondent and all State Tax Agents Boards as meeting half the required course of study.

16.     However the respondent asserts that the CPA 110 Financial Planning unit has insufficient course content that relates to taxation to meet the balance of the required course of study.

17.     The respondent relies upon a letter dated 10 June 2009 from Ms Lisa Carroll, General Manager Professional Programs and Pathways, CPA Australia, which states that the Australian income tax law comprises only 30% of the course content of the CPA 110 Financial Planning unit. This unit is not accepted by any State Tax Agents' Boards as sufficient to meet the requirements for the purposes of Regulation 156(2)(d) as it does not represent a course of study in Australian income tax law that adequately develops the skills, knowledge and understanding of Australian income tax law to the standard required by the respondent, as set out in the Guidelines, for registration as a tax agent .

18.     In his application the applicant seeks to rely on other matters, including his undertaking of the Mentorship program, his completion of the CPA's Public Practice course and his work experience since 2003.  However, it is clear that none of these assist in proving that the applicant can satisfy the requirements of Regulation 156(2)(d). 

Tribunal’s Findings

19. The Tribunal finds that neither the Board, nor on review the Tribunal, has any discretion to depart from the requirements of the prescribed qualifications in Regulation 156. Likewise, neither the Board nor the Tribunal can avoid the operation of the express terms of s251BC(1), namely that a person who does not hold the prescribed qualification is not a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters. Where a proposed nominee of a tax agent is not a fit and proper person, s251KC(2) of the ITAA 1936 makes it mandatory for the Board to refuse registration. It is clear that neither the Board nor the Tribunal on review has any discretion to do anything other than refuse registration in those circumstances.

20.     Accordingly, unless the applicant can satisfy the Tribunal on the evidence that he has completed the course of study required by Regulation 156(2)(d) and as set out in the Guidelines, his application must fail.

21. On the evidence, the applicant has failed to demonstrate the successful completion of a course of study in Australian income tax law that is acceptable to the respondent in satisfaction of the requirement of Regulation 156(2)(d) and he therefore does not hold the prescribed academic qualifications for the purpose of s251BC(1)(b)(ii) of the ITAA 1936.

22. In consequence, by the operation of s251BC(1) of the ITAA 1936, the applicant is not a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters.

Decision

23. The Tribunal affirms the refusal of the applicant’s application to be registered as nominee of a tax agent under s251KC(2) of the ITAA 1936 and accordingly affirms the decision under review.

I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member

Signed: ..(sgd) T Freeman......................
  Associate

Date/s of Hearing  5 August 2009
Date of Decision  7 September 2009
Counsel for the Applicant         Self Represented 
Counsel for the Respondent     Mr T Burrows