Soussou and Tax Agents' Board of Victoria

[2008] AATA 68

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 68

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No  2007/3923

GENERAL  ADMINISTRATIVE  DIVISION		)
Re		KHALIL SOUSSOU

Applicant

And TAX AGENTS' BOARD OF VICTORIA

Respondent

DECISION

Tribunal Mr John Handley, Senior Member

Date25 January 2008

PlaceMelbourne

Decision The decision under review is affirmed.

(Sgd)  John Handley
Senior Member

  

TAX AGENT – application for registration refused – not a fit and proper person – absence of relevant experience and qualification – applicant has not been engaged in relevant employment – decision affirmed

Income Tax Assessment Act 1936(Cth) s 251BC and s 251JA

Income Tax Regulations 1936 (Cth) reg 156 (2) (c) (i), (ii) and (iii), reg 156 (6)

Re Civiti and Tax Agents' Board of Victoria [1990] AATA 250; 21 ATR 3781 (23 October 1990)

Re D'Alessandro and Tax Agents' Board of Victoria [1993] AATA 41; (1993) 25 ATR 1037 (5 February 1993)

Re Modini and Tax Agents' Board of Queensland [2005] AATA 1200

Re Underwood and Tax Agents' Board of Queensland [1993] AATA 228; (1993) 26 ATR 1188 (26 July 1993)

REASONS FOR DECISION

25 January 2008   Mr John Handley, Senior Member

1.      Mr Soussou, the applicant in these proceedings, has applied to review a decision made by the Tax Agents' Board of Victoria (the Board) on 13 August 2007 which declined his application for registration as a tax agent.  In making that decision the Board decided that he had not demonstrated . . . sufficient relevant work experience for the purposes of . . . registration as a tax agent.

2.      The applicant contended at the hearing that the decision of the respondent should be set aside for two principle reasons namely:

(i)        He had been the subject of discrimination by reason of his age; and

(ii)He did have sufficient work experience to qualify for registration as a tax agent.

3.      At the commencement of the hearing, the applicant sought to have the hearing held in private.  That application was foreshadowed by a letter he wrote to the Registrar on 17 October 2007 which relevantly recorded:

This is in regard to my appeal which is based on age discrimination grounds.  I feel that my age is a personal subject and therefore wish to have the hearing held in private.

4.      I declined the application.  Section 35 of the Administrative Appeals Tribunal Act 1975 determines that hearings in this Tribunal should be conducted in public and the Tribunal is obliged to take such steps as are reasonably necessary to ensure that the public nature of the hearing is preserved (refer s 35(1A)).  Additionally, s 35(3) compels the Tribunal to consider (when an application is made for a hearing to be held privately), the principle that it is desirable that hearings of proceedings before the Tribunal should be held in public and that evidence given before the Tribunal and the contents of documents lodged with the Tribunal or received in evidence by the Tribunal should be made available to the public and to all the parties . . .

5.      I was not satisfied that the hearing should have been conducted privately when the only basis advanced for that application was discrimination by reason of his age.  There was nothing from the documents lodged nor was there any evidence which would indicate that the applicant had ever been discriminated, by the Board or elsewhere, by reason of his age or for any other reason.  I was not satisfied that preservation of the public nature of Tribunal hearings or the principle of hearings being held in public should be offended by upholding the application for a private hearing.

the legislation

6.      Section 251JA of the Income Tax Assessment Act 1936 (ITAA) compels the Board to register an applicant as a tax agent if the Board is satisfied that the applicant is a fit and proper person to prepare income tax returns and transact business on behalf of tax payers in income tax matters.

7.      Section 251BC of the ITAA records that a person is not a fit and proper person as described under s 251JA if (relevantly) the person does not hold qualifications – whether academic or by way of experience or otherwise – as prescribed.

8. The prescribed qualifications are relevantly found at reg 156 (2) (c) of the Income Tax Regulations 1936. (2)(c).  That sub-reg is reproduced as follows namely

(2)A qualification is that a person

(a) . . .

(b) . . .

(c)    has:

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

(ii)otherwise been engaged in relevant employment to an extent that the Board regards as equivalent to the employment mentioned in subparagraph (i); or

(iii)been engaged in such other employment, and for such time, as the Board regards as equivalent to being engaged in the relevant employment mentioned in subparagraph (i); and

9. At reg 156 (6) the words relevant employment are defined as follows:

relevant employment means employment by a person or a partnership, or as a member of a partnership, in the course of which there has been substantial involvement in income tax matters including:

(a)the preparation or examination of a broad range of income tax returns; and

(b)the preparation or examination of objections to assessments issued in respect of such returns; and

(c)the provision of advice in relation to income tax returns, assessments or objections.

the applicant's submissions

10.     The applicant submitted that he was qualified by way of relevant experience to be registered as a tax agent.  His history relating to taxation matters was not in issue and may be summarised as follows:

(i)He was an employee of MSB Taxation and Accounting Services (MSB) between 30 June 1999 and 15 October 1999.  During that time he completed approximately 200 taxation returns.  Approximately 100 returns were for individuals and the remaining 100 returns comprised returns for companies, trusts and partnerships.

(ii)He was engaged as a volunteer with the Tax Help Program administered by the Australian Taxation Office for four years from 1994 completing individual returns, for about three months of each year at the Springvale Community Aid and Advice Bureau.  The applicant said that he completed approximately 2000 individual returns whilst engaged in this program.

(iii)He has been employed from December 2003 to date with Synertec Pty Ltd as a Finance Manager.  Initially he completed trust returns but later, when Synertec incorporated, he completed company returns for it.  Additionally, he has completed fringe benefit and BAS returns on behalf of Synertec.

(iv)He has assisted friends and relatives complete individual income tax returns for about 10 years at approximately 20 returns per year.

(v)From 1999, he has completed objection notices on behalf of Synertec and has assisted other persons to complete such notices.

(vi)He has completed BAS returns for his church (a registered non-profit organisation) as a volunteer.

(vii)He has achieved a number of academic qualifications namely – Associate Diploma of Business (Accounting) in 1993, Bachelor of Business in 1997, completion of the Certified Practising Accountant program in 2000 and registration as a CPA in 2003.

11. The applicant contended that he did satisfy reg 156(2)(c)(ii) and (iii) because he had been engaged in relevant employment by reason of preparation by him of a broad range of income tax returns.

12.     Additionally it was submitted that he had been discriminated by reason of his age which had caused him difficulty obtaining employment as a tax agent.  It was submitted that his experience was sufficient to permit him to be registered as a tax agent and he did not understand why he had been rejected.

respondent's submissions

13.     Ms Thompson, on behalf of the respondent, submitted that her client was obliged to grant persons status as tax agents only if they met the legislative requirements.  She submitted that the applicant was not a fit and proper person as defined because he had not been engaged in relevant employment within the meaning of reg 156 (6).

14.     Specifically, it was submitted that the voluntary work with the Tax Help Program together with his unsupervised employment for three and a half months with MSB was not relevant employment as defined because he had not been substantially involved in preparation or examination of a broad range of income tax returns.  Ms Thompson pointed to the lodging of seven objection notices only, the limited lodging of company partnership and trust returns and provision of advice as indicating the absence of substantial involvement in the preparation and examination of a broad range of returns.

15. Ms Thompson submitted that the applicant's contention that he suffered discrimination by reason of his age was a matter beyond the scope of s 251JA, s 251BC and reg 156.

conclusion and reasons for decision

16.     The applicant's contention that he suffered discrimination by reason of his age is a matter beyond the scope of the present enquiry.  He is presently 55 years of age.  If the qualifying provisions of the Act and the Regulations are satisfied, it would not matter if he was 25 or 95 years of age.  The respondent would be obliged to register him.  Nowhere in the decision under review is any reference made to the applicant's age.  The decision to decline registration is confined entirely to the inability of the applicant to demonstrate sufficient relevant work experience.  There is nothing which points to the applicant being treated less favourably by the Board than persons of a different age.  I acknowledge the applicant's evidence that he had difficulty obtaining employment after he obtained his CPA qualification.  That difficulty may have been associated with his age.  It may also have been by reason of the absence of relevant work experience sought by potential employers.  The discrimination alleged is beyond the authority of this Tribunal and any rights available to the applicant should be pursued elsewhere.

17.     The qualification for registration as a fit and proper person is confined to the preparation of income tax returns and transacting business on behalf of tax payers in income tax matters.  The words fit and proper person of themselves are unfortunate but in the context of this legislation the words are not referrable to the integrity or honesty of the person.  They are words used to determine whether an applicant for registration as a tax agent satisfies the relevant qualifying provisions.  The words reflect the policy objective of the ITAA and the regulations that tax payers should have confidence in tax agents as being appropriately qualified, in part by experience and expertise, to prepare and advise in relation to income tax returns.  For reasons which follow I am not satisfied that the applicant does satisfy the qualifying provisions.

18. The applicant has not been engaged in relevant employment on a full time basis for not less than a total of 12 months in the preceding five years. He does not meet the first qualifying provision under reg 156(2)(c) and he was correct in submitting that that provision did not apply to him.

19. However, it was submitted by him that he did meet reg 156 (2) (c) (ii) and (iii). He does not. Those two sub-regs refer to engagement in either relevant employment or such other employment as being the equivalent of the relevant employment referred to in sub-reg (i).  The applicant has not been engaged in relevant employment within the meaning of sub-reg (6) because he has not been engaged in employment which has exposed him to substantial involvement in income tax matters which have required him to prepare or examine a broad range of income tax returns and preparation or examination of objections to assessments and the provision of advice in relation to income tax returns, assessments or objections.  It is to be noted that relevant employment as defined is conjunctive in construction.

20.     The only occasion where the applicant was employed on a full time basis in completing individual, partnership, trust and company returns was for approximately three and half months in 1999 at which time he had partially completed the CPA program only.  He submitted that he then completed approximately 200 returns, 50 per cent of which were for individuals and the remaining were returns for companies, trusts and partnerships.  That three and a half month period which occurred some seven years prior to his application had a duration well short of the 12 month period in the five years preceding the date of application.  The respondent regarded that employment as limited and unsupervised.  The applicant submitted the employment was supervised by the Principals of MSB who checked and verified every return that he completed on behalf of clients.  The concept of supervision is not found within the legislation but is probably related to experience and expertise in employment.  Re Modini and Tax Agents' Board of Queensland [2005] AATA 1200 the Tribunal referred to the concept of supervision by reference to s 251N of the ITAA and by reference also to a Tribunal decision in Re Underwood and Tax Agents' Board of Queensland [1993] AATA 228; (1993) 26 ATR 1188 (26 July 1993). Whilst s 251N is not strictly relevant to these proceedings – because the applicant was an employee of MSB – it is worthy to note in concluding this part that the applicant asserted that every return completed by him was subject to the supervision of his Principals, yet the Customer Relations Manager of MSB in a letter of 18 October 1999 (T7) reported that the applicant performed his duties unsupervised.

21.     I think that the applicant substantially fails by reference to the definition of relevant employment.  He must of course satisfy sub-reg (6) before he can satisfy sub‑reg (2)(c).  He cannot demonstrate full time employment for 12 months in the period of five years preceding the date of application.  He cannot, in my view, satisfy relevant employment because he has not had substantial involvement in a broad range of income tax returns.

22.     Despite his commendable service as part of the Tax Help Program, he was confined to lodging individual returns only as a volunteer.  Additionally, he has assisted friends and relatives complete individual returns being approximately 20 in number for each of the last 10 years.  He has assisted in the preparation and lodging of seven objection notices since 1999.  Subsequent to the ending of employment with MSB in 1999, he has completed trust and company returns, Fringe Benefit returns and BAS returns on behalf of Synertec his current employer.  He has completed and lodged BAS returns on behalf of his church.  Since leaving MSB, except for the limited number and type of returns completed with Synertec, the returns he has completed have not been in employment as referred to in reg 156 (6).

23.     The applicant cannot in my view demonstrate that he has prepared or examined a broad range of income tax returns.  He has completed a considerable number of individual returns but he has prepared very few other types of returns.  His involvement in preparation of returns, objection notices and giving advice cannot be regarded as the equivalent to that envisaged by relevant employment (refer reg 156 (2) (a) (ii), (iii) and (6).

24.     It may be thought unnecessary to resort to dictionary assistance in comprehending the word broad, it being a word commonly understood, but for the purposes of this application, the Macquarie Dictionary defines the word as meaning of great breadth; of great extent; large; not limited or narrow; main or general.  In my view, the relatively few returns ‑ other than returns on behalf of individuals ‑ precludes the applicant from demonstrating that he has been engaged in the preparation or examination of a broad range of income tax returns.  (Refer discussion in Re Civiti and Tax Agents' Board of Victoria [1990] AATA 250; 21 ATR 3781 (23 October 1990) and in Re D'Alessandro and Tax Agents' Board of Victoria [1993] AATA 41; (1993) 25 ATR 1037 (5 February 1993).

25.     Additionally, for the purposes also of sub-reg (6) the applicant has prepared seven objection notices since 1999 which could not satisfy the concept of substantial involvement in income tax matters. Whilst it is assumed the applicant gave advice in relation to objection notices, it is not known, nor was it the subject of evidence, that he gave advice in relation to income tax returns and assessments. I presume he did at least for some of the returns. But even if he could satisfy this part of reg 156 (6), he cannot satisfy the other parts. All parts of reg 156 (6) must be satisfied and for the above reasons they are not.

26.     In the circumstances, I am satisfied the applicant has not been engaged in relevant employment.

27. It therefore follows that I cannot be satisfied that reg 156(2)(c) either (i) or (ii) or (iii) has been satisfied.

28.     In the circumstances the decision under review will be affirmed.

I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of:
Mr John Handley, Senior Member

Signed:  Grace Carney, Personal Assistant

Date of Hearing  14 January 2008
Date of Decision  25 January 2008
Solicitor for the Applicant          Self Represented
Solicitor for the Respondent     Australian Government Solicitor