Mihajlovic v Tax Practitioners Board
[2025] ARTA 353
•10 April 2025
Mihajlovic and Tax Practitioners Board [2025] ARTA 353 (10 April 2025)
Applicant/s: Peter Mihajlovic
Respondent: Tax Practitioners Board
Tribunal Number: 2023/8091
Tribunal:General Member Darian-Smith
Place:Sydney
Date: 10 April 2025
Decision:The Tribunal affirms the decision under review.
..........[SGD]..............................................................
General Member Darian-Smith
Catchwords
TAX AGENTS – refusal of registration – whether applicant has undertaken required “relevant experience” – whether applicant is a “fit and “proper person” – decision under review affirmed.
Legislation
Administrative Appeals Tribunal Act 1975 (Cth) ss. 25, 29, 43
Administrative Review Tribunal Act 2024 (Cth) ss. 12, 54, 105
Tax Agent Services Act 2009 (Cth) ss. 2-5, 20-5, 20-15, 20-25, 40-5, 40-10, 40-25, 90-5, 90-10
Tax Agent Services Regulations 2009 r. 21, Part 2 Schedule 2 items 206, 209Tax Agent Services Regulations 2022 r. 21, Part 3 Schedule 2 items 206, 209, 212
Cases
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Stasos v Tax Agents’ Board of New South Wales (1990) 21 ATR 974
Mihajlovic and Tax Practitioners Board [2022] AATA 342
Oleshko and Tax Practitioners Board [2016] AATA 237
Grosfield and Tax Practitioners Board [2014] AATA 100
GSXZ and Tax Practitioners Board [2024] AATA 1303Secondary Materials
TPB(EP) 02/2010 Fit and Proper Person
Statement of Reasons
In its decision dated 7 September 2023, the Tax Practitioners Board (Board) rejected, under section 20-25(1) of the Tax Agents Services Act 2009 (Cth) (TASA), the application made by the Applicant (Mr Mihajlovic) for registration as a tax agent under the TASA (the Reviewable Decision).
The Reviewable Decision was made by the Board’s Conduct Committee at its meeting on 7 September 2023.[1] The Reviewable Decision was communicated to Mr Mihajlovic in the Board’s letter to him dated 3 October 2023.[2]
[1] T4, Tribunal Hearing Book pages 647 - 653.
[2] T5, Tribunal Hearing Book pages 654 - 657.
On 31 October 2023, Mr Mihajlovic filed an application for review of the Reviewable Decision.[3]
[3] T1, Tribunal Hearing Book pages 1 - 13.
Mr Mihajlovic has filed a Statement of Facts, Issues and Contentions dated 13 August 2024 (Applicant’s SFIC). Mr Mihajlovic also seeks to rely on his witness statements dated 13 August 2024 (with exhibits) (First Mihajlovic Statement) and dated 3 February 2025 (with Annexure A) (Second Mihajlovic Statement). He also relies on a witness statement of Andrew Maroc dated 12 August 2024 (with annexures) (Maroc Statement). At the hearing, Mr Mihajlovic tendered a 2-page document detailing the hours worked by him in the 10-year period from 12 February 2015 until 11 February 2025 (Schedule of Hours Worked).
The Board filed a Statement of Facts, Issues and Contentions dated 15 February 2024, which was superseded by an Amended Statement of Facts, Issues and Contentions dated 16 September 2024 (Respondent’s ASFIC). The Board also filed an Outline of Submissions dated 31 January 2025 (Respondent’s Submissions).
The parties agree upon the issues for determination by the parties.[4] The issues for determination can be stated as follows:
(a)Whether Mr Mihajlovic has satisfied the Board as to the requirements under section 20-5(1)(a) and (b) of the TASA and is therefore eligible for registration as a tax agent with the Board under section 20-5(1) of the TASA.
(b)More specifically, whether Mr Mihajlovic:
(i)satisfies the requirements prescribed by the regulations under section 20-5(1)(b) of the TASA, in that he has undertaken at least 8 years of full-time relevant experience (or part time equivalent) in the last 10 years, as required under paragraph (b) of Item 206 of Schedule 2 of the Tax Agent Services Regulations 2022 (TAS Regulations) (the Experience Requirement). and
(ii)is a fit and proper person under section 20-5(1)(a) of the TASA (the Fitness Requirement). and
(c)Whether the Reviewable Decision was the correct or preferable decision.
[4] Respondent’s ASFIC, [1]; Applicant’s SFIC, [2].
The parties also agree as to the chronology of events as set out in the Respondent’s ASFIC.[5] The aspects of the Board’s chronology of relevant facts which are of assistance for present purposes are set out below (in summary form with the direct quotations referenced).
[5] Respondent’s ASFIC at [2] - [24]; Applicant’s SFIC [3].
Mr Mihajlovic was registered with the Board as a tax agent from 14 April 2014, subject to a business activity statement (BAS) Services condition (BAS Services condition), preventing him from preparing and lodging income tax returns (ITRs) for clients.
On 17 June 2021, following an investigation under Subdivision 60-E of the TASA, the Board terminated Mr Mihajlovic’s tax agent registration under section 40-5(1)(c) of the TASA and imposed a non-application period of 12 months from the termination date under section 40-25(1) of the TASA (2021 Termination Decision).[6] The 2021 Termination Decision took effect from 19 August 2021.
[6] T3, Tribunal Hearing Book pages 54 - 58.
The Board, in making the 2021 Termination Decision, found that Mr Mihajlovic had provided tax agent services, in preparing and lodging ITRs under his Registration Number (RN), which were outside the scope of the BAS Services condition applicable to his registration. The finding made by the Board was that, in the period from 14 April 2014 until 19 August 2021, Mr Mihajlovic had lodged 589 ITRs under his RN.[7]
[7] ST8, Tribunal Hearing Book pages 700 - 710. The 589 ITR’s comprised 445 individual ITRs, 7 partnership ITRs, 28 trust ITRs, 85 company ITRs and 24 superannuation fund ITRs.
On 2 March 2021, the Board sent a letter to Mr Mihajlovic demanding that he stop preparing and lodging ITRs (Cease-and-desist letter). In the period from 3 March 2021 until 19 August 2021, Mr Mihajlovic lodged a further 60 ITRs.[8]
[8] Mihajlovic and Tax Practitioners Board [2022] AATA 342 at [105], [112] - [113].
The Board made certain observations in the context of Mr Mihajlovic’s application for renewal of his registration as to his fitness and propriety, which it summarises as:
“(a) he was knowingly acting in breach of a condition of his registration.
(b) he had demonstrated, by his choice of language in his correspondence to the [Board], a complete disregard for the [Board] as the regulator of his profession. and
(c) the nature of his correspondence with the [Board] was not of the professional standard to which a person of good fame, integrity and character would uphold.”[9]
[9] T3, Tribunal Hearing Book pages 54 - 58.
The Board found that Mr Mihajlovic was not a fit and proper person within the terms of the TASA, and therefore not eligible for registration as a tax agent but accepts that a finding of lack of fitness and propriety was not part of the 2021 Termination Decision.
On 16 July 2021, Mr Mihajlovic lodged an application for review of the 2021 Termination Decision and a request for a stay order. On 19 August 2021, the Tribunal granted a stay with conditions.[10] On 25 February 2022, the Tribunal affirmed the 2021 Termination Decision in Mihaljovic and Tax Practitioners Board[11] (Mihajlovic). The termination of Mr Mihajlovic as a tax agent took effect from 26 March 2022.
[10] T3, Tribunal Hearing Book pages 59 - 60.
[11] [2022] AATA 342.
The Respondent’s SFIC referred the Tribunal to the following findings in Mihajlovic which are relevant to Mr Mihajlovic’s breach of the BAS Services condition, his evidence of claimed “relevant experience” and his conduct bearing on the question of his fitness and propriety:
(a) “So far as the period from January 2018 until August 2021 is concerned, there is no question that Mr Mihajlovic was preparing and lodging tax returns. He was not doing so under the supervision and control of a registered tax agent such that he might be permitted to do so as “relevant experience” under the Regulation.”[12]
(b) “there was no evidence from any supervisor to the effect that they provided supervision.”[13]
(c) “the fact that since August 2014 the tax returns that were lodged were lodged under Mr Mihajlovic’s tax agent number is inconsistent with the exertion of supervision by someone else who is a registered tax agent having their own registration number.”[14]
(d) “the real difficulty that confronts Mr Mihajlovic over the entire period of his registration is that the condition on his registration was clear and simple, and despite that condition, he provided tax agent services that went beyond what the condition permitted him to do. The work in question did not satisfy the condition of “relevant experience”, because in lodging tax returns using his own tax agent number the inference is that he was doing the work on his own accord and without supervision and control. There is no evidence that would permit a finding that he was supervised and controlled in doing that work at any time and as I have said, in any event, after January 2018 for a period of three years he undertook work in breach of the condition on his registration.”[15]
(e) “I have found that Mr Mihajlovic did not undertake work since August 2014 under supervision and control such that would count as relevant experience for the purpose of the Regulations.”[16]
(f) “in the face of clear statements from the Board that it regarded Mr Mihajlovic’s conduct in breach of the condition, Mr Mihajlovic eschewed the Board’s authority and continued to engage in like conduct. Even if he did not agree with the Board’s position on the situation, it is remarkable that he did not adopt a less aggressive stance in face of the Board’s explanation to him of exactly what it was that he was doing that was considered by the Board to be wrong.”[17]
(g) “the imposition of conditions upon registration is a serious matter especially having regard to their purpose, namely confining tax agents to subject areas which are considered by the Board to be appropriate. The imposition of conditions plays an important part in the scheme of registration of tax agents under the Act. The disregard of those conditions undermines that scheme and undermines the authority of the Board.”[18] and
(h) “This case involves a serious departure, over a long period of time - even on the most conservative approach about three and a half years – from conditions that were laid down and that applied to the privilege given to a tax agent to provide tax agent services, even if those services were of a limited kind. The conduct undermines the confidence that the public should be able to have that tax agents who provide tax agent services are qualified and experienced to do so.”[19]
[12] [2022] AATA, [123].
[13] [2022] AATA, [125].
[14] [2022] AATA, [126].
[15] [2022] AATA, [129].
[16] [2022] AATA, [134].
[17] [2022] AATA, [135].
[18] [2022] AATA, [136].
[19] [2022] AATA, [139].
In the Reviewable Decision, the Board determined that:
(a)Mr Mihajlovic had not satisfied the Experience Requirement.
(b)Mr Mihajlovic had not satisfied the Fitness Requirement.
(c)Accordingly, Mr Mihajlovic did not meet the requirements prescribed by the TASA and the TAS Regulations and was not eligible for registration as a tax agent under subsection 20-5(1)(a) and 20-5(1)(b) of the TASA. and
(d)Mr Mihajlovic’s application for registration as a tax agent was rejected under section 20-25(1) of the TASA because he was not eligible for registration having not met the Experience Requirement and/or the Fitness Requirement.[20]
[20] T5, Tribunal Hearing Book page 655.
In respect of the Experience Requirement, the Reviewable Decision noted:
“1. The relevant experience was substantially the same information previously considered by the AAT, where the Tribunal found “the work in question did not satisfy the definition of ‘relevant experience’ because in lodging tax returns using his own tax agent number the inference is that he was doing the work on his own accord and without supervision and control.
2. Your relevant experience was not sufficient for the purposes of registration under item 206 in Schedule 2 of the TAS Regulations.”
In respect of the Fitness Requirement, the Reviewable Decision noted that, in addition to points 1 and 2 in the previous paragraph:
“3. In your communications, you have shown no genuine remorse for your previous behaviour and further do not appear to properly acknowledge the wrongdoings that led to your previous termination.”[21]
[21] T5, Tribunal Hearing Book page 656.
The 12-month non-registration period imposed under the 2021 Termination Decision expired on 26 March 2023. On 28 March 2023, Mr Mihajlovic lodged with the Board a new application for registration as a tax agent (Registration Application).[22]
[22] T3, Tribunal Hearing Book pages 87 - 102.
To provide supporting evidence for the Registration Application of his “relevant experience” for the purposes of clause 206 in Part 2 Schedule 2 of the TAS Regulations, Mr Mihajlovic submitted a Statement of Relevant Experience (SRE) dated 12 June 2023 to the Board.[23] Mr Mihajlovic also submitted an SRE dated 28 March 2023[24], and, subsequently, an amended SRE dated 21 April 2023[25], prepared by a registered tax agent, James Wong.
[23] T3, Tribunal Hearing Book pages 118 - 121.
[24] T3, Tribunal Hearing Book pages 122 - 125.
[25] T3, Tribunal Hearing Book pages 126 - 129.
The SRE dated 12 June 2023 was relied upon by Mr Mihajlovic to demonstrate his relevant experience in the period between 2014 and 2018. The James Wong SRE’s were relied upon to demonstrate relevant experience in the form of work carried out by Mr Mihajlovic under the supervision and control of a registered tax agent in the period from 14 April 2014 until 30 November 2018. Mr Mihajlovic also sought to rely on a range of other documentation to support his Registration Application, including employment documentation from accounting practices he had worked for, correspondence including letters of support and extracts of returns lodged by or for Mr Mihajlovic.
The evidence provided by Mr Mihajlovic to the Board, which was said to demonstrate that the Experience Requirement, was not accepted by the Board for the following reasons:
(a) The period from 2014 to 2023 included time during which Mr Mihajlovic was operating under the BAS Services condition and time after his registration as a tax agent was terminated on 26 March 2022.
(b) The SREs prepared by Mr Wong, detailing Mr Mihajlovic’s relevant experience whilst under the supervision and control of a registered tax agent, included experience gained when Mr Mihajlovic was lodging ITRs in breach of the BAS Services condition attaching to his registration.[26]
[26] Respondent’s ASFIC, [18].
On 1 August 2023, the Board sent a submission to Mr Mihajlovic concerning the Registration Application and requested his response by 15 August 2023.[27] Mr Mihajlovic provided a response on 13 August 2023.[28] The Reviewable Decision followed on 7 September 2023.
[27] T3, Tribunal Hearing Book pages 19 – 20.
[28] T3, Tribunal Hearing Book pages 638 – 646.
LEGISLATIVE FRAMEWORK
The object clause of the TASA, at section 2-5(1), states the object of ensuring that tax agent services are to be provided to the public in accordance with appropriate standards of professional and ethical conduct.
A registration regime is contained in Part 2 of the TASA, which applies to individuals or entities who provide, or seek to provide tax agent services. Subdivision 20A of Part 2 of the TASA deals with eligibility for registration as a tax agent.
Section 20-5(1) of the TASA provides, relevantly, as follows:
“(1) An individual, aged 18 years or more, is eligible for registration as a registered tax agent of BAS agent if the Board is satisfied that:
(a) the individual is a fit and proper person; and
(b) the individual meets the requirements prescribed by the regulations (including, but not limited to, requirements relating to qualifications and experience) in respect of registration as a registered tax agent or BAS agent;”
Section 20-15 of the TASA sets out the criteria for determining whether an individual is a fit and proper person, including that: “the Board must have regard to:
(a) whether the individual is of good fame, integrity, and character;”
Section 20-25 of the TASA deals with registration and, in respect of the granting of an application for registration, states at section 20-25(1):
“(1) If you have applied to the Board for a type of registration, the Board must grant your application if you are eligible for registration of that type. Otherwise, the Board must reject your application.”
A definition of tax agent service is provided in section90-5 of the TASA which states:
“(1) A tax agent service is any service:
(a) that relates to:
(i) ascertaining liabilities, obligations or entitlements of an entity that arise, or could arise, under a taxation law; or
(ii) advising an entity about liabilities, obligations or entitlements of the entity or another entity that arise, or could arise, under a taxation law; or
(iii) representing an entity in their dealings with the Commissioner; and
(b) that is provided in circumstances where the entity can reasonably be expected to rely on the service for either or both of the following purposes:
(i) to satisfy liabilities or obligations that arise, or could arise, under a taxation law;
(ii) to claim entitlements that arise, or could arise, under a taxation law.”
The TAS Regulations are relevant for the purposes of the Experience Requirement. Regulation 21 of the TAS Regulations states:
“For the purposes of paragraph 20-5(1)(b) of the Act, the requirements in respect of registration of an individual as a registered tax agent are that one or more of clauses 201 to 211 of Part 2 of Schedule 2 applies in relation to the individual.”
Clause 206(b) of Part 2 of Schedule 2 of the TAS Regulations contains the requirement that an individual in the position of Mr Mihajlovic: “has undertaken at least 8 years of full time relevant experience (or part time equivalent) in the last 10 years.”
Relevant experience is defined in clause 212, which provides, so far as is relevant to this proceeding:
“relevant experience” means work by an individual:
(a) as a registered tax agent: or…
(c) under the supervision and control of a registered tax agent; or…
(f) of another kind approved by the Board;
that includes substantial involvement in the provision of one or more of the types of tax agent services described in section 90-5 of the Act, or substantial involvement in the practice of a particular area of taxation law to which one or more of those types of tax agent services relate.” (References elsewhere in these Reasons for Decision to category (a) or to category (f) are references to those sub-paragraphs in the definition above).
APPLICANT’S CONTENTIONS
Mr Mihajlovic accepts the chronology of facts set out in the Respondent’s ASFIC at paragraphs [2] – [24] and the Tribunal’s findings in Mihajlovic regarding his past breaches of the BAS Services condition and the unprofessional nature of his dealings with the Board.[29]
[29] Applicant’s SFIC, [3].
In respect of the latter finding, Mr Mihajlovic’s position is that: “his unprofessional dealings did not reflect a deliberate disregard of his regulatory obligations and the authority of the regulator but arose out of growing frustration when he felt the regulator was acting inconsistently with his genuine, but he now accepts objectively unreasonable and mistaken, understanding of his regulatory obligations.”[30]
[30] Applicant’s SFIC, [4].
Mr Mihajlovic submits that in respect of both the 2021 Termination Decision and the decision in Mihajlovic:
(a)both decisions were made under section 40-5(1)(c) of the TASA (concerning a breach of a condition of his registration) and were not based on a finding that he was not a “fit and proper person”. and
(b)the Tribunal in Mihajlovic expressly recognised that the question of “relevant experience” was not relevant to its determination of the question of whether the BAS Services condition had been breached. Accordingly, its observation that it was not satisfied that Mr Mihajlovic “has sufficient relevant experience to be registered as a tax agent” was obiter dicta.[31]
[31] Applicant’s SFIC, [5(a), (b)].
In relation to the Experience Requirement, Mr Mihajlovic contends that this requirement has been met. His submissions can be summarised as follows:
(a)the pathway to registration for Mr Mihajlovic involves the application of section 20-25(1) of the TASA, after satisfying the requirements of section 20-5(1) of the TASA and Part 2 Schedule 2 of the TAS Regulations at clause 206(b) (as to the experience requirement, read with clause 212 which defines “relevant experience”).[32] The consideration of relevant experience involves a substantive element and a positional element.
(b)The substantive element of relevant experience (to be read with the definition of a “tax agent service” in section90-5 of the TASA) comes from the part of the definition of “relevant experience” which reads: “includes substantial involvement in the provision of one or more of the types of tax agent services described in section 90-5 of the Act, or substantial involvement in the practice of a particular area of taxation law to which one or more of those types of tax agent services relate.”[33]
(c)The positional element comes from the definition of relevant experience in clause 212 of Part 2 Schedule 2 the TAS Regulations, where the roles in which work can be carried out are listed and include work “(a) as a registered tax agent”, or “(c) under the supervision and control of a registered tax agent”, or “(f) of another kind approved by the Board.”
(d)In making the Reviewable Decision, the Board adopted an approach to “relevant experience” which was too narrow, by referring in its Reasons for decision only to the positional element of the definition in determining whether Mr Mihajlovic’s experience was obtained “under the supervision and control of a registered tax agent.”[34]
(e)Mr Mihajlovic can satisfy the Experience Requirement if both the substantive and positional elements of relevant experience are considered together. In calculating the substantive element, the standard requirement of 12,320 hours over 10 years (35 hours x 44 weeks x 8 years) is sourced from the Board’s Submission to its Conduct Committee.[35]
(f)For the purposes of clause 206(b) of Part 2 of Schedule 2 of the TAS Regulations, the Tribunal is to consider the 10-year period up the date of its decision.[36] The Schedule of Hours Worked contains a calculation of Mr Mihajlovic’s hours worked for the 10 year period up to the date of the hearing (11 February 2025), broken down into Period A (1 March 2022 to date), Period B (1 December 2018 – 26 March 2022) and Period C (12 February 2015 – 30 November 2018). The total hours of experience are calculated at 15,493 which exceeds the standard requirement of 12,320 hours.
(g)The positional element is satisfied in relation to period A by the facts that Mr Mihajlovic has been working as a part time employee at four companies in the period since February 2022, carrying out work in category “(f) of another kind approved by the Board.”[37]
(h)The positional element in relation to periods B and C raises the issue that some of the work done by Mr Mihajlovic in those periods was work done in breach of the BAS Services condition (involving the provision of non-BAS services). Mr Mihajlovic accepts that the hours of work carried out in breach of the BAS Services condition are hours in which he was inadequately supervised (Period C) or unsupervised (Period B). Nevertheless, he submits that the hours carried out in breach of the conditions for his registration should be counted as “relevant experience” hours, either under category “(a) as a registered tax agent” or, alternatively under category (f).[38] and
(i)Mr Mihajlovic submits that satisfying the positional element of the definition of “relevant experience” is a matter of form, to be treated separately from the Board’s power to impose and enforce conditions on registration. The argument is framed as: “Nothing in the regulatory regime contemplates that non-satisfaction of conditions on registration would have the drastic and automatic consequence of work actually undertaken not being considered “relevant experience”, particularly given that conditions may be breached to varying degrees.”[39]
[32] See paragraphs [26] – [32] of these Reasons; Applicant’s SFIC, [27] – [28].
[33] See paragraph [29] of these Reasons; Applicant’s SFIC, [28].
[34] Applicant’s SFIC, [30].
[35] T3, Tribunal Hearing Book page 35.
[36] Oleshko and Tax Practitioners Board [2016] AATA 237, [19] – [20].
[37] Applicant’s SFIC, [33].
[38] Applicant’s SFIC, [34].
[39] Applicant’s SFIC, [34].
In relation to the Fitness Requirement, Mr Mihajlovic submits that he is a “fit and proper person” for the purposes of section 20-5(1)(a) of the TASA. He submits that the Board should be satisfied that he is “of good fame, integrity and character” under section 20-15(a) of the TASA. He contends that none of the events which the Board must consider under section20-15(b) of the TASA have occurred.
Further, the observations of Hill J in Stasos v Tax Agents’ Board of New South Wales[40] (Stasos), are said to be directed to competence and honesty together with the development of insight into their wrongdoing and a demonstration of contrition through a focus on rehabilitation.[41] Mr Mihajlovic submits that although he provided non-BAS services in breach of a condition of his registration, there is no evidence that the services he provided were sub-standard or incompetently provided.[42]
[40] (1990) 21 ATR 974, 985.
[41] Applicant’s SFIC, [9] – [11].
[42] Applicant’s SFIC, [13].
Mr Mihajlovic provides a detailed explanation of what he concedes were his “unprofessional” dealings with the Board. His submission is that his conduct “did not arise out of a deliberate disregard of his regulatory obligations and the authority of the regulator.” Rather, he “became confused about his regulatory requirements.”[43] The following matters were said to have contributed to Mr Mihajlovic’s “confusion”:
(a) some lack of clarity in communications with the Board about whether he satisfied the “relevant experience” requirement for registration, including the Board’s reference to the “catch all” in sub-paragraph (f) of the definition of “relevant experience” and a perceived lack of explanation as to why the BAS Services condition was imposed.[44]
(b) his, now accepted by him as unreasonable, assumption that the supervision offered by Mr Napier and later by Mr Wong was adequate and his mistaken belief that once he had accumulated 13,440 hours, he no longer needed to work under supervision. When that mistaken belief was contradicted by the Board, he in effect doubled down on his mistaken position and his dealings with the Board became belligerent.[45] and
(c) his misunderstanding of the Cease-and-desist letter. The misunderstanding related both to the nature of the correspondence and to the perceived ambiguity (in that it appeared to him to be providing alternatives) of the passage which read:
“You must immediately stop any conduct referred to above. If you are providing tax agent services, you must also cease such activity whilst you have a condition of BAS.
We expect written confirmation of the above by 17 March 2021. Alternatively, you must provide reasons as to why you think your conduct is not a breach of the TASA. Failure to do so will lead to this matter being escalated for further action.”[46]
[43] Applicant’s SFIC, [14] – [18].
[44] Applicant’s SFIC, [15] – [18].
[45] Applicant’s SFIC, [20] – [21].
[46] Applicant’s SFIC, [22] – [24].
Finally, Mr Mihajlovic states that he has expressed contrition about his past misconduct and dealings with the Board. He says that the Tribunal should be satisfied that “he is unlikely to engage in further misconduct” and that he will in future seek external guidance by way of supervision from Mr Maroc, and from solicitors, to ensure that he fully understands his regulatory obligations.[47]
[47] Applicant’s SFIC, [25].
In closing submissions, Mr Mihajlovic emphasised the following points: that the position of the Board regarding his registration had been dealt with in a manner confusing to him, that he was not knowingly in breach of the BAS Services condition, that he had not sought to conceal his conduct from the Board, that there was no issue on the evidence about the quality of his work, that he had been genuinely mistaken as to his position when providing tax agent services and that the Tribunal should find that he had expressed appropriate remorse and contrition. Counsel also made submissions about how the calculation of hours in the Schedule of Hours Worked should be approached by the Tribunal under category (a) of the definition of “relevant experience”, alternatively under category (f).
BOARD’S CONTENTIONS
In relation to the Experience Requirement, the Board contends that Mr Mihajlovic does not meet this requirement because he is not able to show with probative evidence that he has undertaken at least 8 years of full-time relevant experience in the last 10 years (needed to satisfy clause 206(b) of Part 2 Schedule 2 of the TAS Regulations).
In examining the 10-year period from 12 February 2015 until 11 February 2025, the Board submits that the Tribunal should find that in the period:
(a) 15 April 2014 (first registration date) until 7 March 2018 (date before renewal of his tax agent registration), Mr Mihajlovic filed not less than 248 ITRs under his Tax Agent Number (TAN). Each individual filing of an ITR was a breach of the BAS Services condition on his registration. The terms of the registration letter dated 2 May 2014 and the fact that Mr Mihajlovic applied to have that condition lifted in each of 2018 and 2020, shows that he was not “confused” about the condition. The lodging of ITRs in breach of the TASA in this period cannot be counted as “relevant experience”. Further, there is no probative evidence that Mr Wong provided “supervision and control” in this period. Mr Wong did not provide a witness statement and was not called as a witness.[48] and
(b) 8 March 2018 to 19 August 2021, Mr Mihajlovic filed not less than 341 ITRs under his TAN. These ITR lodgements were all made in breach of the BAS Services condition on his registration. The Board became aware of this happening on 2 March 2021, by which time 281 ITRs had been lodged. Between 3 March 2021 (when the Board warned Mr Mihajlovic to stop breaching the condition) and 15 July 2021, a further 29 ITRs were lodged. Between 16 July 2021 (when the Board informed Mr Mihajlovic that his tax agent registration would be terminated) and 19 August 2021, a further 31 ITRs were lodged. The Board submits that the Tribunal would find that the breaches in the latter period involved complete awareness on his part that he was lodging ITRs in deliberate breach of the BAS Services condition. The lodging of ITRs in this second period in breach of the TASA also cannot be counted as “relevant experience.”[49]
[48] Respondent’s Submissions, [49] – [52].
[49] Respondent’s Submissions, [53] – [57].
Further, the Board submits that Mr Mihajlovic has not provided probative evidence, and not called any witnesses, to demonstrate that he was obtaining the necessary full-time “relevant experience” under the supervision of a registered tax agent.
In relation to the Fitness Requirement, the Board submits that Mr Mihajlovic is not a fit and proper person for TASA purposes and therefore he is not presently eligible for registration as a tax agent under section 20-5(1)(a) of the TASA. The Board identifies the following matters as indicative that Mr Mihajlovic is not a person of “good fame, integrity and character” for the purposes of section 20-15(a) of the TASA:
(a) the termination of his registration for significant breaches of the BAS Services condition over more than 7 years.
(b) the failure to meet the Experience Requirement and therefore to conduct himself as a registered tax agent should.
(c) the failure to adequately acknowledge his misconduct and display meaningful remorse.
(d) ignoring the Cease-and-desist letter. and
(e) communicating with the Board in an unprofessional manner and disregarding its regulatory authority.[50]
[50] Respondent’s Submissions, [59] – [60].
The Board contends that the serious sustained misconduct involved in the breaches means that Mr Mihajlovic may require a longer period to demonstrate that he meets the Fitness Requirement, as stated by Hill J in Stasos.[51]
[51] (1990) 21 ATR 974, 985; Respondent’s Submissions, [62].
The Board says that limited weight should be accorded to Mr Mihajlovic’s expression of contrition and remorse in evidence at the hearing. That is because of the lengthy history of misconduct and the fact that remorse has been expressed almost 10 years after the initial breach of the BAS Services condition. The Tribunal was referred to its decision in GSXZ and Tax Practitioners Board[52], where it stated:
“…it is one thing to be contrite at the heal of a hearing when facing the prospect of termination of registration. It is another to be contrite when first confronted with the alleged conduct. The Applicant’s claimed contrition is fairly to be judged by his failure to own up to his conduct when confronted with it by the Board over a lengthy period.”[53]
[52] [2024] AATA 1303.
[53] [2024] AATA 1303, [62].
In closing submissions, the Board emphasised the following points: that the quality of the evidence of relevant experience relied on by Mr Mihajlovic had not improved since the decision in Mihajlovic, the breakdown of the work done in the 7 year breach of registration condition period was not adequately dealt with in evidence, that in calculating relevant experience under category (a) Mr Mihajlovic could not include prohibited work, there was no properly supervised tax agent work which he could establish, that it was not open to the Tribunal to use category (f) to approve prohibited work, that Mr Mihajlovic was knowingly acting in breach of the BAS Services condition by no later than 16 July 2021 and had continued to ignore the Board after that date, that he had never accepted aspects of the findings in Mihajlovic, that his expression of contrition remained at odds with his attitude to the lodging of ITRs, that he failed to properly inform Mr Maroc (as his proposed supervisor) of critical facts and had not progressed the proposed terms of supervision by Mr Maroc beyond the initial planning document and that Mr Mihajlovic still lacked the necessary professional judgment needed to be a registered tax agent.
CROSS-EXAMINATION OF WITNESSES
Mr Mihajlovic and Mr Maroc, who was called as a witness as a registered tax agent who was proposed to be a potential supervisor for Mr Mihajlovic, were each cross examined by counsel for the Board.
The main points which emerged from the cross-examination of Mr Mihajlovic were his evidence that:
(a)he accepted, after some back and forth with counsel, that the BAS Services condition was in place and applied to him from day 1, being a date in 2014 after the 2 May 2014 registration letter and not later than August 2014 when he commenced providing BAS services and lodging ITRs.[54]
(b)after the initial 2 or 3 ITRs, Mr Napier did not provide direct supervision of his work.
(c)he agreed that, even taking his case at its highest, he was unsupervised from December 2018 onwards.
(d)he continues to disagree with some of the findings of the Tribunal in Mihajlovic. For example, he disagrees with the Tribunal’s findings (at Mihajlovic [45]) about his dealings with Mr Ewart and he disagrees with the Tribunal’s findings (at Mihajlovic [105] - [107]) as to the meaning of the Cease-and-desist letter and as to how it can or should be read.
(e)he discussed the period for which he was to be supervised with Mr Maroc who agreed to supervise him for a period of 2-3 years. and
(f)he told Mr Maroc that the supervision exercise would involve supervising him and about 40 clients.
[54] First Mihajlovic Statement, [33].
Mr Maroc stated in the Maroc Statement, and confirmed orally in evidence-in-chief, that he had been a registered tax agent since 1986. The main points which emerged from his cross- examination can be summarised as follows:
(a)he is a long-term friend of Mr Mihajlovic going back to school days in the mid 1960’s.
(b)his practice (with one other partner) is based in the Australian Capital Territory, but he understands that the proposed supervision of Mr Mihajlovic would be in Sydney.
(c)he was not aware that in the period from Mr Mihajlovic’s registration letter dated 2 May 2014 until August 2021 that there were over 600 breaches by Mr Mihajlovic of the BAS Services condition of his registration.
(d)he was not aware that in the period from January 2019 to August 2021, Mr Mihajlovic was lodging ITRs unsupervised. His evidence was that “I thought it was supervised the whole time.”
(e)he had not been shown, and was not otherwise aware of, the Cease-and-desist letter.
(f)he was not aware that Mr Mihajlovic had continued to lodge ITRs after he received the Cease-and-desist letter.
(g)he was aware that the Board had terminated Mr Mihajlovic’s registration in 2021, but he was not aware that the 2021 Termination Decision had gone to the Tribunal and been affirmed in Mihajlovic.
(h)he was not aware that Mr Mihajlovic had continued to lodge ITRs after he had received notice from the Board on 15 July 2021 that it was considering terminating his registration.
(i)he prepared the draft Supervision Plan (Annexure C to the Maroc Statement) with input from Mr Mihajlovic, but no steps had been taken to carry out the planned actions pending this hearing. For example, there had been no initial planning meeting held and there was not a settled plan as to how Mr Maroc and Mr Mihajlovic might share documents.
(j)he understood the period of supervision to be 12 months and was prepared to offer 12 months of supervision to Mr Mihajlovic. and
(k)he understood that Mr Mihajlovic was proposing to have four groups of clients going forward, with about 20 to 30 ITRs between them.
Mr Maroc was asked in re-examination if he would be available to supervise Mr Mihajlovic for longer than 12 months. Mr Maroc said that he was going to be 73 years old in May 2025, but he would probably be available for “a bit longer” if he was asked to extend. He was asked if he could do 3 years of supervision and his evidence was “that would be a stretch.”
CONSIDERATION OF THE ISSUES
By way of general observation, a serious issue for Mr Mihajlovic in this matter was the decision by him not to call any witnesses (other than Mr Maroc) to support his own evidence as to the key issues for determination by the Tribunal. Witnesses who might have been able to give evidence which may have been helpful to Mr Mihajlovic’s case (and whose evidence would also have been of assistance to the Tribunal), but who were not called, included:
(a)Mr Napier and Mr Wong, as to their respective supervision of his work as a tax agent.
(b)any witness from amongst his four present employers[55] who could independently verify the taxation law related work Mr Mihajlovic was currently undertaking, and the hours he spends doing that work.
(c)any witness who could provide independent verification of the information presented by Mr Mihajlovic in the Schedule of Hours Worked, as to the many thousands of hours claimed to have been worked by him.
(d)any witness who could provide a client testimonial as to the competence of the tax agent or related taxation law work which Mr Mihajlovic had performed for them. This evidence would have carried more weight than Mr Mihajlovic’s stated reliance on the absence of evidence of complaints from clients or from the ATO to establish his competence. and
(e)any witness who could provide relevant evidence as to his character.
[55] Second Mihajlovic Statement, [5]. The current employers identified are Efficiency Works Pty Ltd, Synergy Recruitment Solutions, Treloar Trading Pty Ltd and Halliwell.
The Tribunal notes that when asked in cross-examination why Mr Napier had not been called to give evidence, Mr Mihajlovic’s response was “I don’t want to muck people’s lives up over mine.” The shortcomings of this approach, leaving to one side the risk of the Tribunal drawing an adverse inference from the absence of witnesses, can be illustrated by Mr Mihajlovic’s reliance upon the SREs dated 28 March 2023 and 21 April 2023 prepared by Mr Wong (referred to in paragraph [20] above) when Mr Wong was not made available to explain those documents and to allow the documentary evidence to be tested.
As a separate general observation, the Tribunal understood the purpose and good sense in principle in Mr Mihajlovic proposing a supervision plan for himself, which involved Mr Maroc as an established and very experienced registered tax agent providing the supervision (supervision proposal). However, as emerged from Mr Maroc’s evidence in cross-examination, Mr Mihajlovic apparently neglected to brief Mr Maroc fully as to critical elements of his employment history and his past misconduct and his problematic interactions with the Board. Further, there does not appear to have been adequate discussion between Mr Mihajlovic and Mr Maroc as to how the supervision proposal would work in practice or even to be clear as to the period for which Mr Maroc’s supervision would be required.
These aspects, together with the apparent decision by Mr Mihajlovic not to seek any input from the Board as to whether Mr Maroc would be a registered tax agent who was acceptable to the Board for the purposes of the supervision proposal, made it difficult for me to be satisfied that the supervision proposal was really a viable option.
In the event, the Tribunal is not satisfied that the supervision proposal is viable because the evidence shows that:
(a)Mr Maroc’s consent to act as Mr Mihajlovic’s supervisor was not an informed consent.
(b)It is unclear whether a term of up to 3 years supervision is possible—at best, it would be a “stretch” for Mr Maroc.
(c)the practical working details of the supervision proposal, including as to the sharing of information between Mr Mihajlovic and Mr Maroc, are sketchy. and
(d)even if factors (a) – (c) can be resolved, there is nothing to indicate that Mr Maroc is a supervisor who would be regarded as appropriate or acceptable to the Board.
The Tribunal makes the following findings of fact:
(a)In the period from 15 April 2014 to 7 March 2018, Mr Mihajlovic was registered as a tax agent subject to the BAS Services condition, which prevented him from preparing and lodging ITRs.
(b)In the period from 15 April 2014 to 7 March 2018, Mr Mihajlovic lodged approximately 248 ITRs under his TAN.[56]
(c)Each lodgement by Mr Mihajlovic of an ITR referred to in (b) above was in breach of the BAS Services condition.
(d)In the period from 8 March 2018 (when Mr Mihajlovic’s registration as a tax agent was renewed subject to the BAS Services condition) to 19 August 2021, Mr Mihajlovic continued to be registered as a tax agent subject to the BAS Services condition.
(e)In the period from 8 March 2018 to 19 August 2021, Mr Mihajlovic lodged approximately 341 ITRs under his TAN.
(f)In the period from 8 March 2018 to 2 March 2021 (the date of the Cease-and-desist letter), Mr Mihajlovic lodged 281 ITRs.
(g)In the period from 3 March 2021 to 15 July 2021, Mr Mihajlovic lodged 29 ITRs.
(h)In the period from 16 July 2021 to 19 August 2021, Mr Mihajlovic lodged 31 ITRs.
(i)Each lodgement by Mr Mihajlovic of an ITR referred to in (e), (f), (g) and (h) above was in breach of the BAS Services condition. and
(j)In respect of the period from 16 July 2021 to 19 August 2021, referred to in (h) above, there can be no doubt that Mr Mihajlovic knew that in lodging ITRs in that period, he was acting in deliberate breach of the BAS Services condition.
[56] ST8, Tribunal Hearing Book pages 700-710. ST8 is also the source of information for sub-paragraphs (e), (f), (g) and (h).
On any view of the evidence as to the tax agent work carried out by Mr Mihajlovic in the period from 15 April 2014 until 19 August 2021, a very significant portion of the time spent by Mr Mihajlovic in this period spanning more than 7 years was spent preparing and lodging ITRs in breach of the BAS Services condition attaching to his registration as a tax agent.
The Tribunal has considered the Schedule of Hours Worked, together with Mr Mihajlovic’s submissions in relation to that document, which are summarised at paragraph [35] (d) – (i) above. The Tribunal has proceeded on the basis that the substantive standard requirement for 8 years full time “relevant experience” hours worked in the 10-year period up to the date of the determination of the application for review would need to total not less than 12,320 hours. The Tribunal needs to be satisfied on the material before it that at least 12,320 hours of “relevant experience” have been undertaken by Mr Mihajlovic before it would determine that the Experience Requirement has been met.
The Experience Requirement can only be satisfied if Mr Mihajlovic can demonstrate to the Tribunal on probative evidence that the total hours to be counted under sub-paragraphs “(a) as a registered tax agent”, “(c) under the supervision and control of a registered tax agent” (category (c)), or “(f) of another kind approved by the Board” of the definition of “relevant experience” in clause 212 of Part 2 of Schedule 2 of the TAS Regulations equates to at least 12,320 hours. Counsel for Mr Mihajlovic identified 4,278 hours (said to be 18% of the 23,072 total hours recorded for Periods B and C) which he said could be attributed to the work associated with the preparation and lodgement of 578 BAS returns.
As to category (a), Mr Mihajlovic has contended that his hours spent working on the many hundreds of ITRs prepared and lodged by him in breach of the BAS Services condition should be counted because nothing in the regulatory regime contemplates the outcome that hours worked in breach of a condition of his registration would not be counted. The Tribunal rejects this submission. Work carried out “as a registered tax agent” can only mean work lawfully carried out as a tax agent in compliance with the obligations (as to registration and otherwise) set out in the TASA and TAS Regulations.
Mr Mihajlovic points to the fact that the civil penalties provision in section 50-5(1) of the TASA only prohibits the provision of tax agent services by a person who is unregistered.[57] The Tribunal accepts that the non-compliant conduct of Mr Mihajlovic which the Board complains of does not give rise to potential liability for a civil penalty. However, the civil penalty provisions of the TASA do not need to apply before conduct which is in breach of the TASA or the TAS Regulations can properly be characterised as unlawful conduct. The unlawfulness of the conduct can arise both from the fact that it is conduct in breach of the legislation and regulations and from other features such as the tax agent holding themselves out as being able to perform the full range of work which a registered tax agent can undertake, when that was simply not the case.
[57] Applicant’s SFIC, [34].
Mr Mihajlovic decided to carry out a very large number of hours of work over a 7-year period in breach of the BAS Services condition. In spending many hours preparing each of the 589 ITRs under his RN in breach of his conditions of registration and accepting the risk of consequences for his continuing registration of doing that, he cannot at the same time seek to count the hours spent doing this non-compliant (and unlawful) work to support his argument that he has satisfied the Experience Requirement (and should therefore have his registration re-instated).
As to category (c), Mr Mihajlovic accepts that the hours shown in Periods B and C in the Schedule of Hours Worked are, respectively, unsupervised hours or inadequately supervised hours. Neither Mr Napier nor Mr Wong was called as witnesses to shed further light on the Period C hours. Mr Mihajlovic’s own evidence about the supervision provided by Mr Napier[58] and Mr Wong[59] suggests that there would only be a modest number of hours truly “under the supervision and control of a registered tax agent” which could be counted towards meeting the Experience Requirement.
[58] First Mihajlovic Statement, [31], [38].
[59] First Mihajlovic Statement, [39] – [40].
As to category (f), the starting point is section54 of the ART which provides:
“54 Tribunal can exercise powers of decision-maker
For the purposes of reviewing a reviewable decision, the Tribunal may exercise all the powers and discretions that are conferred on the decision-maker by an Act or an instrument made under an Act”.
There are two aspects of the Experience Requirement in which the possible exercise by the Tribunal of the power under category (f) to approve as “relevant experience” work of another kind is important. The first is in respect of the Period A hours in the Schedule of Hours Worked which Mr Mihajlovic states (in the Second Mihajlovic Statement) are the hours that he has been working on a part time basis as an employed accountant since February 2022 at four different companies, doing accounting work of the kind referred to in the substantive part of the definition of “relevant experience”.[60] The second is as an alternative way of counting Period B and C hours which have not otherwise been counted under category (a) or category (c).
[60] Applicant’s SFIC, [33].
The Tribunal accepts in principle the first aspect of the suggested use of category (f) but not the second. The Tribunal has already noted (at paragraphs [53] and [54] above) the difficulties for the Tribunal caused by Mr Mihajlovic’s failure to provide more probative evidence, particularly any evidence from independent witnesses, as to both the substantive and positional elements of the “relevant experience” hours he seeks to rely upon to establish the Experience Requirement.
The Tribunal accepts that with better evidence than is now before the Tribunal, Mr Mihajlovic might well be able to substantiate some or all the Period A hours in the Schedule of Hours Worked.
However, the Tribunal does not accept that it would be a proper use by it of the power in category (f) to enable the counting of those hours which have previously been rejected by it under category (a), because those hours were spent doing non-compliant tax agent work in relation to the preparation and lodgement of ITRs in breach of the BAS Services condition. The non-compliant hours should not be counted under category (f) for the same reasons that I determined the non-compliant hours should not be counted under category (a).
It follows that the Tribunal has not been persuaded on the material which is before the Tribunal that Mr Mihajlovic can demonstrate on probative evidence to the civil standard of proof that he has accumulated the necessary hours[61] of “relevant experience” he needs to satisfy the Experience Requirement.
[61] Not less than 12,320 hours – see paragraph [60].
The Tribunal’s finding that Mr Mihajlovic has not demonstrated that he satisfies the Experience Requirement means that he does not satisfy the eligibility requirement for registration as a tax agent under section 20-5(1)(b) of the TASA.
As the eligibility requirements under section 20-5(1) of the TASA are cumulative, it follows that in determining that Mr Mihajlovic has not satisfied the requirement for registration as a tax agent under section 20-5(1)(b) of the TASA, the Tribunal is not strictly required to determine the separate question of whether Mr Mihajlovic satisfies the Fitness Requirement (under section 20-5(1)(a) of the TASA) in order for it to dispose of the application for review.
Noting what is said about the Fitness Requirement in [73] but having regard to the fact that the Reviewable Decision turns on the Board’s finding that Mr Mihajlovic did not satisfy either of the Experience Requirement or the Fitness Requirement, consideration of the latter requirement follows.
The Board’s Explanatory Paper “TPB(EP) 02/2010 Fit and proper person”[62] (EP2) provides a useful starting point for the Tribunal in considering the principles which guide a determination of fitness and propriety.
“55. EP2 is not binding on the Tribunal but, as a publicly available guideline issued by the Respondent, regard should be had to it. As to determining fitness and propriety, EP2 states: A determination on whether a person is a fit and proper person requires the TPB to make a value judgment in the context of the activities in which the person is or will be engaged considering all the circumstances of a given case.
56. Therefore, a determination on whether a person is fit and proper is not made by applying a single, standard test or rule, but rather, by balancing a range of considerations that may be seen to be relevant to fitness and propriety generally. Whether or not the considerations present in a given case result in a finding that a person is not fit and proper for registration will depend on a range of considerations, including (but not limited to) the nature and degree of the misconduct or improper conduct, and prior conduct or experience of the tax practitioner and any relevant surrounding circumstances.”[63]
[62] T10, CB 1831-1875.
[63] CB 1840.
In Australian Broadcasting Tribunal v Bond,[64] (Bond) a case concerning whether Alan Bond was a “fit and proper person” to hold a broadcasting license, Toohey and Gaudron JJ. said:
“The expression “fit and proper person”, standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept “fit and proper” cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of those activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed that it will not occur, or whether the general community will have confidence that it will not occur.” [65]
[64] (1990) 170 CLR 321.
[65] (1990) 170 CLR 321, 380.
The Tribunal in Grosfeld and Tax Practitioners Board[66], cited Mason CJ’s observation in Bond that a person “who lacks a proper appreciation of their responsibilities or does not discharge them is, or may be adjudged not to be, a fit and proper person.”[67]
[66] [2014] AATA 100, [36].
[67] (1990) 170 CLR 321, 349.
In Stasos, Hill J, in identifying the key features of the tax agent’s role, said the agent must be able to carry on the dealings he will have with the ATO in an “atmosphere of mutual trust”. His Honour expanded on this point:
“The Commissioner and his officers must be able to accept that, to the best of the ability of the agent, returns have been prepared which are true and accurate. This is particularly so now that the Commissioner has proceeded to a system of self-assessment, with inaccuracies only coming to light in the case of random audit, or, presumably, other information coming to the hands of the Commissioner.”[68]
[68] (1990) 21 ATR 974, 984.
If follows that just as the honesty and integrity of the tax agent is not called into doubt in the agent’s dealings with the ATO, it must not be called into doubt in matters proceeding before the Board, the Tribunal, or a court. The “atmosphere of mutual trust” within which the tax agent must carry on his dealings with the ATO must also extend to the dealings which Mr Mihajlovic has with the Board, as the responsible regulator for tax agents.
In circumstances where, by the Board’s 2021 Termination Decision, there has been an earlier termination of Mr Mihajlovic’s registration, an important step in restoring mutual trust between Mr Mihajlovic and the Board on the road to obtaining re-registration will be the extent to which he has demonstrated his contrition as well as the steps he has taken in rehabilitation.
The contrition and rehabilitation aspects were also explained by Hill J in Stasos:
“…a person who has been shown to be other than a fit and proper person to be registered must satisfy the Tribunal considering his re-registration…that he appreciates the significance of his wrongdoing, that he regrets it and that he has rehabilitated himself such that it is truly unlikely that there will be any lapse in the future of the standards that are required of him. The more serious his dereliction from duty the longer may be the time necessary to show this. It will not be sufficient for him to merely express his contrition. The Tribunal must be satisfied on the balance of probabilities that not only is that contrition actually felt, but that he will not again deviate from the high standards required of him as a registered tax agent.”[69]
[69] (1990) 21 ATR 974, 985.
The Tribunal accepts that the Tribunal’s decision in Mihajlovic was not dependent upon a finding that Mr Mihajlovic was not a fit and person within the terms of the TASA. The Tribunal also accepts that in having regard to whether Mr Mihajlovic is of “good fame, integrity and character” under section 20-15(a) of the TASA, there is no evidence that Mr Mihajlovic has done any of the things referred to in section 20-15(b) of the TASA. The matters which the Board relies upon as indicative that he is not a person of “good fame, integrity and character” are summarised in paragraph [45] above.
There is also merit in Mr Mihajlovic’s submission that consideration of his contrition and the steps taken by him to bring about his rehabilitation should not be allowed to be approached by the Board in a way that would lock him out of possible eligibility for re-registration on an indefinite basis. Two years have now elapsed since 26 March 2023, when Mr Mihajlovic’s period of disqualification was completed. The question is whether Mr Mihajlovic has now shown the contrition which Hill J described in Stasos, and otherwise rehabilitated himself in a way that makes it unlikely he will fail to meet the standards which would be required of him if he was to be re-registered as a tax agent in future.
The Tribunal in large measure accepts Mr Mihajlovic’s evidence that he genuinely regrets the past misconduct which led to the 2021 Termination Decision. Having said that, his answers under cross-examination in respect of the detail of the findings of the Mihajlovic decision, make it clear that he continues to dispute some of the findings in Mihajlovic, including those around several of his past dealings with employees of the Board (see paragraph [50(d)] above).
I am not satisfied that an appropriate atmosphere of mutual trust has yet been achieved between Mr Mihajlovic and the Board. Based on the Board’s submissions, it remains of the view that Mr Mihajlovic still lacks a proper appreciation of his responsibilities as a tax agent operating under the TASA legislative regime. It follows from the Board’s assessment, and applying what was said by the High Court in Bond, that it is unlikely the general community can be judged to have confidence that future misconduct by Mr Mihajlovic will not occur. There has been some progress but there remains work to be done. Mr Mihajlovic does not need to like the Board, but he does need to respect the job that the Board and its officers are carrying out in the proper regulation of tax agents and prospective tax agents.
The Tribunal accepts in principle that the supervision proposal, or rather a more fully developed variant of it, has potential as an avenue to possible re-registration, provided it includes a supervisor and a plan acceptable to the Board. However, for the reasons given above, I am not persuaded that the supervision proposal as it currently sits before the Tribunal is a viable proposal.
I have carefully weighed the evidence of Mr Mihajlovic, both in explanation of what has happened in the past and in support of his proposed future re-registration, with the Board’s contention that a lack of the professional judgment required of a registered tax agent (whether supervised or not) remains intrenched in him. I am not satisfied on the material before me that Mr Mihajlovic meets the Fitness Requirement.
CONCLUSION AND DECISION
For the reasons set out above, I have concluded that:
(a)Mr Mihajlovic has not satisfied either the Experience Requirement or the Fitness Requirement.
(b)Accordingly, Mr Mihajlovic did not meet the requirements prescribed by the TASA and the TAS Regulations and was not eligible for registration as a tax agent under section. 20-5(1)(a) and section 20-5(1)(b) of the TASA. and
(c)The correct or preferable decision on the material before me is for the Reviewable Decision to be affirmed.
Accordingly, the Tribunal affirms the decision under review.
Date of Hearing: 11 February 2025
Counsel for the Applicant: Mr A. Bhasin
Solicitor for the Applicant: Ms J Ng, McLachlan Thorpe Partners
Counsel for the Respondent: Mr K Josifoski
Solicitor for the Respondent: Ms S Pannam, Tax Practitioners Board
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