Thomas and Tax Practitioners Board
[2021] AATA 2164
•11 June 2021
Thomas and Tax Practitioners Board [2021] AATA 2164 (11 June 2021)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2021/2078
Re:Jeremy Thomas
APPLICANT
AndTax Practitioners Board
RESPONDENT
REASONS FOR DECISION
Tribunal:J C Kelly, Senior Member
Date of decision: 11 June 2021
Date of written reasons: 7 July 2021
Place:Melbourne
The Tribunal refuses the applicant's request under section 41(2) of the Administrative Appeals Tribunal Act 1975 for an order staying or otherwise affecting the operation or implementation of this review.
...........................................
Senior Member Josephine Kelly
Catchwords
PRACTICE AND PROCEDURE – application to stay decision under review – decision to terminate tax agent registration – applicant’s personal circumstances – where public interest against stay order outweighs other considerations – stay refused
Legislation
Tax Agent Services Act 2009 (Cth)
Administrative Appeals Tribunal Act 1975 (Cth)
REASONS FOR DECISION
Senior Member Josephine Kelly
7 July 2021
Introduction
The Applicant, Mr Jeremy Thomas, has applied for a stay of the decision made by the Tax Practitioners Board (the Respondent) on 18 February 2021 to terminate his registration as a tax agent and impose a five-year non-application period (the reviewable decision).
The application for a stay is made pursuant to section 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth).
The Applicant’s conduct
The Respondent found that the Applicant breached section 30-10(1) of the Code of Professional Conduct (the Code) in the Tax Agent Services Act 2009 (TASA) by falsifying income documents for twenty-seven (27) taxpayers to facilitate the approval of mortgage applications provided to mortgage aggregator Connective, the National Bank of Australia (NAB), Macquarie and Westpac. The applications were supported by false Notices of Assessment (NOAs), false Taxation Estimates and false Income Tax Returns (ITRs). The Respondent found that the conduct occurred from at least 14 December 2016 to 26 June 2020.
In respect of one of those clients, the Respondent found that the Applicant received $42,250 for providing falsified documents between 20 December 2018 and 18 February 2020. The Applicant claims that the client is a convicted criminal who manipulated the documents and deposited the money into his account and because of the nature of the documents, it is difficult to prove.
The Respondent found that the Applicant manipulated genuine NOAs issued by the Australian Taxation Office for other clients of the company he worked for.
In respect of three taxpayers, the Respondent found that the Applicant knowingly provided false accountant’s verifications in lieu of full income documentation to facilitate the approval of mortgage applications to a credit provider.
The Respondent found that the Applicant provided a falsified bank statement to a finance company in support of a personal loan application.
Consequently, the Respondent was satisfied that the Applicant was not a fit and proper person as required by section 20-5(1)(a) of the TASA.
The Applicant’s evidence
Following is a summary of the Applicant’s evidence. He had initially claimed that he would do work other than as a tax agent, but after finding he could not get other work, he now wishes at some time in the future to work as a tax agent again. He said that he has seen 1,000 clients a year since 2011. The business he worked in involved his father, his brother and himself. His father who is 72 years of age was planning to retire. They had refinanced the family home to buy an office. The business will crumble if his brother works on his own. The business needs the Applicant. His father told him that he had to appeal the reviewable decision if he wanted to work in the business.
The Applicant provided a psychological report dated 3 June 2019 that set out various circumstances the Applicant has faced since 2011 and made a preliminary diagnosis of:
·Major Depression Disorder (single episode) - Moderate to Severe (clinical range)
·Generalised Anxiety Disorder – moderate
·PTSD Symptoms – moderate to severe
·Sleep disorder – moderate – severe
·Psychosocial issues
1. Relationship breakdown
2. Domestic violence
Mr Thomas first consulted the psychologist on 7 January 2019 and had attended a total of 14 consultations up to the date of the report. The psychologist noted that the Applicant demonstrated several behaviours that indicate he is highly motivated to make permanent positive changes to his life and do his best to avoid reengaging with risky behaviours.
The Applicant said that he had spent $15,000 on lawyers who wanted another $10,000. He has done this on his own and had no mental capacity to deal with it. He gave up. It was not clear whether he had dealt with the allegations made by the Respondent on his own or the review application. He complained that the Respondent gave him a very short time to respond to the allegations against him.
When I put to him that his conduct was very serious and intentional, the Applicant said that he has made mistakes, is not seeking a full licence but wants a second chance and asked what he had to do to prove to the Respondent that he could do better, to get his registration back. I told him that it was not my role to advise him about that. After I announced my decision to refuse the application for a stay, Mr Thomas asked the Respondent’s legal representative if he could do administration work in the practice. After a brief discussion, I told the Applicant that that was a matter to discuss with the Respondent’s legal representative after the hearing.
The relevant considerations
I discussed with the parties each of the relevant considerations during the course of the hearing.
During the discussion about the Applicant’s prospects of success, taking into account his desire to show that Respondent that he could do better, I inquired of the Respondent’s legal representative if it was possible to impose conditions on registration. She pointed out that there is a power to allow registration to continue provided the agent does certain things. However, it is difficult to get another tax agent to supervise in these circumstances because it imposes an order on them as well. In brief, it is rarely done.
The difficulty facing the Applicant is having to overturn the finding that he is not a fit and proper person to be a tax agent in the face of the seriousness of his conduct involving a number of clients over a number of years, leaving aside the one client he claimed was a criminal who was altering documentation and paying money into his account. There was a pattern of conduct.
The psychological report does not tell me that his psychological conditions explain why he did what he did. His conduct was intentional, he knew what he was doing. It was not a matter of mere inattention. He accepts that he made mistakes over the last four years.
On the material before me, the Applicant’s prospects of having the decision to terminate his registration as a tax agent set aside are poor. He may have some prospect of having the five-year-non-application period reduced.
I take into account the consequences for the Applicant if the application for the stay is refused. He will be unable to find employment as a tax agent and has been unable to find other employment. He is involved in a family business which may suffer from his inability to work as a tax agent. That business has to finance a mortgage over the family home in respect of the office premises.
The public interest to refuse the stay application outweighs all other consideration because of the serious nature of his conduct over a reasonably lengthy period of time.
The consequences for the Respondent of granting a stay are linked to the public interest argument which outweighs all other considerations.
First, the overarching purpose of the TASA is that the Respondent ensure services provided to the public are of an appropriate standard of professional and ethical conduct. Granting a stay where there has been fraudulent conduct over a long period would adversely affect the standing of the profession in the community.
Secondly, granting the stay, may pose a risk to the community at large, demonstrated by the Applicant’s conduct of providing false income statements for loan applications. That is contrary to the Respondent’s role under the TASA.
I do not consider that the application for review would be made nugatory if the stay were refused. The Applicant can still proceed to the review. He may have success in whole or part. The Applicant says that he understands that he has made mistakes and wants a second chance. He can put those matters to the decision maker in the final proceedings.
If I grant a stay, the Applicant would be able to act as a tax agent between now and the hearing.
The Applicant’s prospects of success are not strong. The public interest in his not acting in that professional role between now and the hearing is overwhelming because his conduct was very serious. The community relies on tax agents to have integrity.
The considerations against granting a stay strongly outweigh those favouring the grant of a stay in these proceedings.
Conclusion
For those reasons, the Tribunal refuses the applicant's request under section 41(2) of the Administrative Appeals Tribunal Act 1975 for an order staying or otherwise affecting the operation or implementation of this review.
I certify that the preceding twenty-eight (28) paragraphs are a true copy of the written reasons for the decision of Senior Member Josephine Kelly.
.............................................
Dated: 7 July 2021
Date of hearing: 11 June 2021 Representative for the Applicant: Self-represented Solicitors for the Respondent: Effie Markesinis for the Tax Practitioner’s Board
0
0