The Applicant and Tax Agent's Board of Tasmania

[2000] AATA 609

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2000] AATA 609

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No T2000/15

GENERAL ADMINISTRATIVE  DIVISION		)
Re		THE APPLICANT

Applicant

And TAX AGENTS' BOARD OF TASMANIA

Respondent

DECISION

Tribunal Mr C P Webster (Senior Member)
A/Prof. B W Davis AM (Part-time Member)

Date21 July 2000

PlaceHobart

Decision The Tribunal decides that the decision of the Tax Agents’ Board of Tasmania dated 24 December 1999 be set aside and substituted with a decision that the company, which the applicant has sought to be registered as a tax agent, be registered as a tax agent with effect from the date of this decision.

[Sgd C P Webster]
  Senior Member

CATCHWORDS

Tax Agents – registration as a tax agent – whether applicant satisfied requirements in respect to eligibility to be tax agent – meaning of “board range” of income tax returns.

Income Tax Regulations – r.156(1) and (2) 

REASONS FOR DECISION

21 July 2000 Mr C P Webster (Senior Member)
A/Prof. B W Davis AM (Part-time Member)        

Issues

1.       The applicant seeks a review of the Tax Agents Board of Tasmania (“the respondent”) of 24 December 1999 which refused to grant registration to a company as a tax agent.

2.      The issue to be determined by this Tribunal is whether the applicant satisfies the qualification criteria set out in Regulation 156(1) and (2) of the Income Tax Regulations (“the Regulations”).

3.      The relevant parts of the Regulations require, amongst other matters that the applicant “shall have been in engaged in relevant employment on a full-time basis for not less than a total of 8 years in the preceding 10 years” (Reg. 156(1)(d)(i).

“Relevant Employment” is defined in Regulation 156(2) which reads as follows:-

“(2) In this regulation ‘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;

(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.”

4.      The particular issue to be determined by the Tribunal was whether the applicant had been involved in the preparation or examination of a “broad range” of income tax returns.

The Evidence and Findings of Fact

5.      The ‘T’ documents were tendered into evidence.

6.      The applicant gave oral evidence.    Her evidence was:-

(a)That since 1983 she had been engaged within the area of income tax returns preparation and associated advice.

(b)That in 1986 she was appointed as manager for northern Tasmania of a tax agent business.   That business was purchased by her present employer in 1988 and the applicant has been employed by that employer since that purchase.

(c)The applicant is paid a salary based on her paid receipts.   During the bulk of her term as northern manager she has had one employee under her supervision whose work preparing income tax returns has to be checked by the applicant.

(d)The applicant receives limited supervision from the principals of her employer, a company, who are based in the south of the state.  

(e)That the applicant personally prepared income tax returns in accordance with the table below from 1990 to date:-

Table of Income Tax Return Detail

1999 to date	1998	1997		1996		1995		1994	1993	1992	1991	1990
Actually Prepared	551	623	616	596		609		582		601	587	512	455
Individual	526	582	573	556		561		540		556	545	485	430
Partnership	18	36	39	37		46		41		45	42	27	25
Company	3	3	3	2		2		1		0	0	0	0
Trust	2	1	1	1		0		0		0	0	0	0
Super-annuation	2	1	0	0		0		0		0	0	0	0
Objections	6
Audits	1	15	16		4		23		2
Re- Assessments	35	11	29		14		34		9	17	10	10
WRE Schedules	2	220
Details of Content of Individual Returns
Business	49	80	93	100		102		94		85	*	*	*
Rental	68	77	117	103		85		67		42	*	*	*
Capital Gains	34	27	21	6		16		18		24	*	*	*
Overseen, Checked, but Prepared by another employee
Individual	131	210	196	210		201		201		235	43
Partnership	9	15	14	14		21		21		14
Company	1	3	2	4		2		3		4	1	1	1
Trust	1	1	1		1		1		1	1	2
Audit	2
Re-Assessments	1	2		2		1		1
WRE Schedules	38
Details of content of Individual returns
Business	18	35	40	35		38		35		43	*	*	*
Rental	23	19	31	31		26		18		15	*	*	*
Capital Gains	4	8	15	4		5		3		2	*	*	*

(h)That the applicant is presently employed as a part-time salaried teacher at TAFE in Launceston providing instruction in taxation and business record keeping.

(i)That the applicant is active in her professional development keeping abreast  of developments in income tax law.

(j)That the practice in which the applicant is presently employed deals with a wide range of taxpayers with an emphasis on small business tax returns and that she had lodged returns on behalf of 39 different occupational groups.

(k)She gave evidence as to the substantial degree of overlap of information provided in preparing various types of returns i.e. individual; trust; superannuation and company returns.

7.      The applicant’s employer gave oral evidence.     His evidence was that he was an accountant and tax agent and was a director of the employer of the applicant.

8.      He was personally responsible for checking income tax returns prepared by the applicant.    He considered the quality of the applicant’s work to be first class and that she made minimal errors.

9.      The credibility of the witnesses was not impugned.  The factual statements made by the witnesses were not disputed by the respondent’s counsel.

10.     The Tribunal is satisfied that both the applicant and the employer’s evidence should be accepted in totality and find as fact the matters of evidence given by the applicant and the employer referred to above.

11.     It was the respondent’s principle argument that the applicant had not involved herself in a preparation of a “broad range” of income tax returns, as the number of company, trust and superannuation returns prepared by the applicant over the last 10 years were low in number.

12.     Counsel referred the Tribunal to a number of other cases which had previously been considered by the Administrative Appeal Tribunal where the issue of whether or not the applicant had a “broad range” of experience.

13.     These cases were decided on their own facts and many of these cases, where the applicant was found not have a “broad range” of experience, were cases where the applicant had not been employed preparing income tax returns for the general public, but had been employed in a very specialist area, such as by the income tax department, or as an accountant for a large corporation, or had prepared returns as an adjunct to other work such as a solicitor.

14.     The term “broad range” was considered in a number of previous Tribunal cases.

15.     In Civiti and Tax Agents’ Board of Victoria (90 ATC 2039), Deputy President Forrest stated:

“The qualifying adjective ‘broad’, is a word of plain meaning and common understanding.   It has a similar meaning to ‘wide’.    ….   The word ‘broad’ is not one of similar meaning to ‘substantial’.   In the context in which they are used, both terms are used as qualifying adjectives.   ‘Broad range’ does not mean the same thing as ‘substantial involvement’ and vice versa.   There may be one without the other.   The respondent has to be satisfied the applicant has acquired both in order to have been engaged in relevant employment within the meaning of reg.156”.

16.     In Chenouda and Tax Agents’ Broad of New South Wales (91 ATC 2027), Deputy President McMahon stated that what was contemplated by the term “broad range”, “…. Is a range of income tax returns, spreading over the spectrum of potential taxpayers”.

17.     Similarly, Deputy President Forgie in Ellis and Tax Agents’ Board of Queensland (92 ATC 2001) states:

“… the expression ‘broad range’ must, in my view connote breadth of subject matter and breadth of returns from a breadth of taxpayers.    As Deputy President McMahon said more elegantly:

‘… what is contemplated by the phrase is a range of income tax returns, spreading over the spectrum of potential taxpayers …”   [See Re Crowly, (NSW) 90 ATC 2004].’”

18.     It appears clear that what the Tribunal must consider in this case is whether or not the applicant has a broad range of experience or a wide range of experience in the preparation of income tax returns.

19.     In the present case the applicant personally prepared 5,732 income tax returns over the past 10 years.    She started the 10 year period as an experienced preparer of income tax returns and  she worked in a similar position  for many years preceding the commencement of the 10 year period.   To that extent she has more experience over the past 10 years than  a person starting the 10 year period with no experience or minimal experience.

20.     She has prepared income tax returns across the broad spectrum of potential taxpayers (on her evidence, 39 occupational groups) and has prepared income tax returns for a wide range of clientele having practiced with a business that has not restricted their client base to any particular occupational group or type of person.

21.     The applicant also had the additional experience of being responsible for checking the work of a subordinate who also prepared income tax returns.   This responsibility could only add to the breadth of experience of the applicant.

22.     Although the number of returns personally prepared by the applicant in the area of trust, company, and superannuation areas were relatively low the Tribunal is satisfied that the applicant has prepared a sufficiently broad range of income tax returns over the last 10 years to satisfy the requirements of reg.156(2)(a).

23.     The Tribunal notes that there is no requirement in the regulations that a potential tax agent must show that they have filed a particular number of a particular type of tax return each year to satisfy the requirements to be registered as a tax agent.    It is left to the Tribunal to consider each applicant on their own individual merits.

24.     Whilst it is apparent that the applicant is a borderline case due to the relatively low number of returns that she has prepared in relation to trust, superannuation and company matters, the Tribunal is still satisfied that the applicant has met the criteria laid down by regulations that she is a fit and proper person to be registered as a tax agent and in particularly has sufficiently a broad range of experience to enable her to satisfy the requirements set out in the regulations.

25.     The Tribunal’s decision is that company be registered as a tax agent with effect from the date of this decision.

I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Mr C P Webster (Senior Member)
A/Prof. B W Davis AM (Part-time Member)

Signed:         .....................................................................................
  Personal Assistant

Date/s of Hearing  30 June 2000
Date of Decision  21 July 2000
Counsel for the Applicant         Mr W M Griffiths
Solicitor for the Respondent     Mr D Wilson (Aust. Government Solicitor)