Mihajlovic v Tax Practitioners Board - [2025] ARTA 353

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, 209
Tax 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 1303
Secondary 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]…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] ARTA 353
Decision Date: 10 April 2025

CaseChat Overview and Summary

Mihajlovic v Tax Practitioners Board involved a dispute between Mr Mihajlovic and the Tax Practitioners Board regarding the latter's refusal to renew Mr Mihajlovic's registration as a tax agent. The case was heard by the Administrative Appeals Tribunal (AAT). The primary issues before the court were whether Mr Mihajlovic had undertaken the required "relevant experience" to meet the statutory conditions for registration, and whether he was a "fit and proper person" to hold such a registration.

The court examined the evidence provided by Mr Mihajlovic to demonstrate his relevant experience. The Tribunal found that Mr Mihajlovic had provided tax agent services outside the scope of the BAS Services condition attached to his registration, including preparing and lodging individual, partnership, trust, company, and superannuation fund tax returns. Despite his submissions, the Tribunal concluded that Mr Mihajlovic had not undertaken relevant experience under the supervision and control of a registered tax agent, as required by the relevant regulations. Additionally, the Tribunal found that Mr Mihajlovic's conduct in continuing to provide these services despite warnings from the Board demonstrated a disregard for the regulatory authority, further undermining his claim to be a fit and proper person for registration.

The AAT upheld the Board's decision to refuse Mr Mihajlovic's application for registration. The court noted that the statutory scheme for tax agent registration is designed to ensure public confidence in the qualifications and experience of tax agents, and Mr Mihajlovic's persistent breach of the conditions attached to his registration, along with his unprofessional conduct, justified the Board's decision. The Tribunal's reasoning was grounded in the need to maintain the integrity and authority of the regulatory framework, and to protect the public interest in ensuring that tax agents are both qualified and trustworthy.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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].

Ratio Decidendi

Legal Principle Established

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.