SHTX and Tax Practitioners Board

Case [2016] AATA 451

SHTX and Tax Practitioners Board [2016] AATA 451 (30 June 2016) 

Division

TAXATION & COMMERCIAL DIVISION

File Number

2014/4225

Re

SHTX

APPLICANT

And

Tax Practitioners Board

RESPONDENT

DECISION

Tribunal

F D O'Loughlin, Senior Member
Date 30 June 2016
Place Melbourne

  1. The decision under review is varied.  In place of the termination of the Applicant’s registration as a tax agent:

    (a)pursuant to s 30-15 of the TAS Act the Applicant be given a written caution;

    (b)pursuant to s 30-20(1) of the TAS Act, the Applicant’s registration be restricted such that unless and until remedial education in courses approved by the Respondent concerning taxation and other compliance obligations of SMSF are undertaken and satisfactorily completed, the Applicant is not to be involved in preparing and lodging SMF returns and statements other than for a SMSF of which the Applicant is a member; and

    (c)pursuant to s 30-20(1)(a) of the TAS Act before 30 June 2017 the Applicant enrol in and satisfactorily complete ‘Ethics, Tax Agent Services Act (TASA) 2009 AND THE Code of Professional Conduct’ offered by The Tax Institute or equivalent course approved by the Respondent.

  2. The parties are directed to consult with each other and then advise the Tribunal within 14 days as to any requests for or opposition to using a pseudonym in the public reporting of this decision.

    ...........[sgd]..................................

    F D O'Loughlin, Senior Member

    TAX AGENTS CODE OF CONDUCT – breach of TASA Code of Professional Conduct – tax agent registration terminated – Applicant experienced personal and health problems – appropriate sanction – comparison with registration and regulation of legal practitioners –  Decision under review varied

    Legislation
    Legal Profession Uniform Law Application Act 2014 (Vic), Schedule 1, ss 299, 120
    Tax Agent Services Act 2009 (Cth) ss 30-1, 30-10, 30-15, 30-20(1), 30-20(1)(a), 60-125(2), 40-5(1)(b), 70-10, 60-95, 60-125, 60-5, 30-30, 30-20, 30-25

    Cases
    Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, 380

    Chamberlain v Australian Capital Territory Law Society (1993) 118 ALR 54
    Harris and Tax Practitioners Board [2014] AATA 430

    Hughes and Vale Pty Ltd v State of NSW (No 2) (1955) 93 CLR 127, 156

    Legal Practitioners Conduct Board v Nicholson [2006] SASC 21
    Legal Services Commissioner v Mirabella [2014] VCAT 339
    Prothonotary v Del Castillo [2001] NSWCA 75, 71
    Re Fearon and Australian Prudential Regulation Authority (2006) 93 ALD 203
    Re George and Australian Securities and Investments Commission [2014] AATA 167
    Re Li and Tax Practitioners Board (2014) 141 ALD 201
    Quinn v Law Institute of Victoria Ltd [2007] VSCA 122, 36
    Stasos v Tax Agents’ Board of New South Wales (1990) 21 ATR 974, 984

    Su v Tax Agents’ Board of South Australia (1982) 61 FLR 1, 4 – 5

    REASONS FOR DECISION

    F D O'Loughlin, Senior Member

    30 June 2016

  3. The Applicant is a registered tax agent without apparent cause for any registration concerns until the present matters arose.  The Applicant was employed as an accountant from 1979 until 2003 and has been self-employed since 2003.  From 2006…

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Details
AGLC
SHTX and Tax Practitioners Board [2016] AATA 451
Case
[2016] AATA 451
Decision Date

CaseChat Overview and Summary

This matter concerned an appeal by a registered tax agent, SHTX, against a decision by the Tax Practitioners Board to terminate their registration. The dispute arose from breaches of the Tax Agents Services Act 2009 (TASA) Code of Professional Conduct. The decision was made by Senior Member F D O'Loughlin of the Administrative Appeals Tribunal.

The Tribunal was required to determine the appropriate sanction for the tax agent's breaches of the Code of Professional Conduct, considering the applicant's personal and health issues at the time of the transgressions, and whether termination of registration was a necessary or proportionate response. The Tribunal also had to consider the public interest and the need to maintain standards within the tax agent profession.

The Tribunal reasoned that while maintaining standards and protecting the public interest were paramount, these objectives could be served by a sanction that acknowledged the applicant's recovery from personal and health issues. The Tribunal noted the availability of a graduated system of sanctions, the miniscule nature of the transgressions in relation to the applicant's overall practice, and the applicant's attempts to address the circumstances. Drawing on principles from the regulation of legal practitioners, the Tribunal concluded that the applicant was not permanently unfit to be registered if appropriate limitations were imposed.

Accordingly, the Tribunal varied the decision under review. Instead of terminating the applicant's registration, the Tribunal issued a written caution, restricted the applicant's ability to prepare and lodge SMSF returns and statements (except for their own SMSF) until remedial education was completed, and mandated the satisfactory completion of an ethics course by a specified date. The parties were also directed to consult regarding the use of a pseudonym in public reporting.

Orders

Orders of the court

1. The decision under review is varied. In place of the termination of the Applicant’s registration as a tax agent:

(a) pursuant to s 30-15 of the TAS Act the Applicant be given a written caution;

(b) pursuant to s 30-20(1) of the TAS Act, the Applicant’s registration be restricted such that unless and until remedial education in courses approved by the Respondent concerning taxation and other compliance obligations of SMSF are undertaken and satisfactorily completed, the Applicant is not to be involved in preparing and lodging SMF returns and statements other than for a SMSF of which the Applicant is a member; and

(c) pursuant to s 30-20(1)(a) of the TAS Act before 30 June 2017 the Applicant enrol in and satisfactorily complete ‘Ethics, Tax Agent Services Act (TASA) 2009 AND THE Code of Professional Conduct’ offered by The Tax Institute or equivalent course approved by the Respondent.

2. The parties are directed to consult with each other and then advise the Tribunal within 14 days as to any requests for or opposition to using a pseudonym in the public reporting of this decision.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Protecting the public interest by maintaining standards requires recognition that the public interest function of a regulatory regime can be regarded as served if the decision maker is satisfied that the offender has recovered.[21] [21]Legal Practitioners Conduct Board v Nicholson [2006] SASC 21, 30 per Doyle CJ, with whom Perry J at 40 and White J at 41 agreed, and the authorities there referred to.DECISION In circumstances where:(a)the current system has a protective function;(b)heath and personal issues are not to be ignored and sufferers are to be afforded sensible moderation of otherwise applicable sanctions;(c)a graduated system of sanction is available, and intended to be applied, so that the sanction applied can be both appropriate in the circumstances and not a ruinous imposition affecting tax agents’ livelihoods;(d)the transgressions occurred concerning a miniscule aspect of the Applicant’s practice;(e)the Applicant was attempting to deal with the relevant circumstances;(f)the Applicant is no longer afflicted by the personal and health issues prevailing at the relevant time; and(g)registration as a tax agent can be allowed with limits on the scope of particular activities and other protective styled orders can be made and thereby achieve the objectives of the new system and maintain standards,it is not appropriate to find that on an ongoing basis the Applicant is not a fit and proper person to be registered as a tax agent if appropriate limits are placed on that registration. An appropriate sanction that addresses these matters, protects the public interest and standards of tax agents and reflects an appropriate balance, is to vary the decision under review as set out below. In place of the termination of the Applicant’s registration as a tax agent:(a)pursuant to s 30-15 of the TAS Act the Applicant be given a written caution;(b)pursuant to s 30-20(1) of the TAS Act, the Applicant’s registration be restricted such that unless and until remedial education in courses approved by the Respondent concerning taxation and other compliance obligations of SMSF are undertaken and satisfactorily completed, the Applicant is not to be involved in preparing and lodging SMF returns and statements other than for a SMSF of which the Applicant is a member; and(c)pursuant to s 30-20(1)(a) of the TAS Act before 30 June 2017 the Applicant enrol in and satisfactorily complete Ethics, Tax Agent Services Act (TASA) 2009 and the Code of Professional Conduct offered by The Tax Institute or equivalent course approved by the Respondent. The parties are directed to consult with each other and then advise the Tribunal within 14 days as to any requests for or opposition to using a pseudonym in the public reporting of this decision.

Ratio Decidendi

Legal Principle Established

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