Tax Practitioners Board v Zada Dedic

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FEDERAL COURT OF AUSTRALIA

Tax Practitioners Board v Zada Dedic [2014] FCA 307

Citation: Tax Practitioners Board v Zada Dedic [2014] FCA 307
Parties: TAX PRACTITIONERS BOARD v ZADA DEDIC
File number(s): VID 1028 of 2013
Judge(s): DAVIES J
Date of judgment: 31 March 2014
Catchwords: TAXATION – application by the Tax Practitioners Board for declaratory and injunctive relief arising out of alleged contraventions of s 50-5(1) of the Tax Agent Services Act 2009 (Cth) – applicant prepared and filed income tax returns – applicant was not a registered tax agent – applicant charged or received other reward for the provision of tax agent services
Legislation: Tax Agent Services Act 2009 (Cth) ss 2-5, 50-5(1), 90-05, 90-10
Taxation Administration Act 1953 (Cth) sch 1, s 388-70
Cases cited:

Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378; [2012] FCAFC 56
Tax Practitioners Board v Campbell [2012] FCA 1153
Tax Practitioners Board v Hogan [2012] FCA 642
Tax Practitioners Board v Munro [2012] FCA 1338

Date of hearing: 24 March 2014
Date of last submissions: 24 March 2014
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 12
Counsel for the Applicant: D Star
Counsel for the Respondent: The respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 1028 of 2013

BETWEEN:

TAX PRACTITIONERS BOARD
Applicant

AND:

ZADA DEDIC
Respondent

JUDGE:

DAVIES J

DATE OF ORDER:

31 MARCH 2014

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1. On 86 separate occasions detailed in Schedule A to this Order, between about July 2010 and October 2012 and in relation to the persons respectively described in the Schedule A to this Order in respect of a particular occasion, the respondent by providing to that person a service:

1.1.that involved the respondent doing one or more of the following:

1.1.1.preparing the person’s income tax return in preparation for lodgement;

1.1.2.lodging the person’s income tax return with the Australian Taxation Office (ATO);

1.2.for which the respondent charged or received a monetary payment, or other reward, for providing the said service;

1.3.which knowledge of the matters referred to in subparagraphs 1.1 and 1.2 above;

1.4.while the respondent was not a registered tax agent pursuant to the Tax Agent Services Act 2009 (Cth) (the Act);

1.5.which was not a service relating to a business activity statement; and

1.6.which was not provided as a legal service,

in each case:

1.7.by reason of the matters referred to in subparagraphs 1.1 and 1.2 above, provided a service that the person could reasonably be expected to rely upon to satisfy liabilities or obligations, or claim entitlements, that arise, or could arise, under a taxation law; and

1.8.by reason of the matters referred to in subparagraphs 1.1 to 1.7 above, supplied a tax agent service in contravention of s 50-5(1) of the Act.

THE COURT ORDERS THAT:

2.For a period of 3 years from the date of this Order, if the respondent is requested…

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Details
Case
[2014] FCA 307
Decision Date

CaseChat Overview and Summary

The Tax Practitioners Board sought declaratory and injunctive relief against Zada Dedic in the Federal Court of Australia. The Board alleged that Ms Dedic had contravened section 50-5(1) of the Tax Agent Services Act 2009 by preparing and lodging income tax returns on behalf of clients without being registered as a tax agent. The Board further claimed that Ms Dedic charged or received other rewards for these services, thereby contravening the Act. Ms Dedic disputed the allegations and the case proceeded to the Federal Court to determine the validity of the Board's claims.

The primary legal issue before the court was whether Ms Dedic's actions constituted a contravention of section 50-5(1) of the Act. This section of the Act prohibits a person from providing a tax agent service unless they are registered as a tax agent, or otherwise exempted. The court had to determine whether the preparation and filing of tax returns, and the receipt of payment for these services, constituted "providing a tax agent service" within the meaning of the Act. Additionally, the court had to decide if Ms Dedic's actions were deliberate or inadvertent and whether they warranted the relief sought by the Board.

The court found that Ms Dedic's actions did indeed contravene section 50-5(1) of the Tax Agent Services Act. The preparation and filing of tax returns, along with the receipt of payment, constituted providing a tax agent service. The court was satisfied that Ms Dedic was aware of her need to be registered and had not sought registration. Consequently, the court granted the relief sought by the Board, including an order prohibiting Ms Dedic from providing certain tax services unless she was registered as a tax agent. The court also required Ms Dedic to provide detailed disclosures to clients before agreeing to provide these services, and to retain and furnish copies of these disclosures to the Board upon request. The court ordered a hearing for the consideration of further penalties and set the costs of the proceeding to be borne by Ms Dedic.

The court ordered that for a period of three years, Ms Dedic must inform any client of specific matters before providing tax services, have the client complete and sign a form acknowledging these matters, retain a copy of the signed form, and furnish a copy to the Board if requested. A hearing for potential penalties was scheduled for 5 May 2014, and Ms Dedic was ordered to pay the Board's costs of the proceeding. Non-compliance with these orders could result in criminal penalties for Ms Dedic.

Orders

Orders of the court

2. For a period of 3 years from the date of this Order, if the respondent is requested to provide to another person or entity a service relating to:

2.1. giving advice concerning entitlements, liabilities or obligations that arise or could arise under a taxation law; or

2.2. preparing for another person or entity a return or statement in relation to an Australian taxation law; or


2.3. lodging for another person or entity a return or statement in relation to a taxation law with the ATO, 


the respondent must, before providing or agreeing to provide the said service, and unless then registered as a tax agent pursuant to the Act, inform the person or entity of the matters referred to in paragraphs 1 to 6 in Form A in Schedule B to this Order and, if the person or entity still requests the service be performed by the respondent:

2.4. have the person or entity complete and sign Form A in Schedule B to this Order; 


2.5. retain a copy of the completed and signed form for a period of 3 years; and 


2.6. provide any such completed and signed form to the applicant within 14 days of its request.

3. A hearing of paragraph 3 of the applicant’s Amended Application be listed for 10:15am, 5 May 2014.

4. The respondent pay the applicant’s costs of the proceeding to the date of this Order, including reserved costs, to be taxed in default of agreement.

TAKE NOTE: the failure to comply with these orders may render the respondent liable to imprisonment, sequestration of property or punishment for contempt.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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