Termination of tax agent registrations - July 2020

Overview

The Tax Agent Services Act 2009 (TASA) was enacted by the Australian Parliament to establish a regulatory framework governing the conduct of tax agents, ensuring they meet professional standards and comply with statutory requirements. The Act addresses the problem of maintaining high standards within the tax agent industry by regulating the registration, conduct, and professional development of tax agents. This legislative initiative aims to protect the public from the risks associated with unqualified or unscrupulous tax agents, thereby maintaining the integrity of the tax system. The Tax Practitioners Board, established under the Act, is responsible for enforcing compliance with the Act’s provisions, including the ability to terminate or suspend the registration of tax agents who fail to meet the necessary standards or requirements.

Scope and Application

The Tax Agent Services Act 2009 (TASA) applies to all tax agents who are registered under the Act, including individuals and entities that provide tax services to clients in Australia. The Act sets out the professional standards and conduct expected of tax agents, as well as the process for registration, renewal, and termination of registration. The Act applies across Australia, including all states and territories. There are no stated exclusions or exemptions in the Act, although certain conduct or transactions may be subject to other laws or regulations. The Act also allows for the creation of subordinate instruments to extend or restrict its application. The recent gazette includes terminations and suspensions of tax agent registrations under the Act, with reasons ranging from surrender of registration to failure to comply with the code of professional conduct.

Key Provisions

The Tax Agent Services Act 2009 (TASA) includes provisions for the termination, suspension, and cancellation of tax agent registrations. Under section 40-110(1)(a), the Tax Practitioners Board can terminate a tax agent’s registration if the agent has surrendered their registration. This was the case for Awesum Financial Services Pty Ltd and other entities listed, all of which surrendered their registrations effective from 7 July 2020. Under section 40-110(1)(b), the Board can terminate a registration if the agent no longer meets the registration requirements or has failed to comply with the code of professional conduct. This was the reason for the termination of Duncan Neil Bell and other agents listed, whose registrations were terminated for failure to comply with the code of professional conduct or for no longer meeting the registration requirements, effective from dates ranging between 6 July and 30 July 2020. The Act imposes several obligations on tax agents, including adherence to the code of professional conduct and maintenance of the necessary qualifications and insurances as stipulated in sections 40-40 and 40-100 of the Act. Agents must ensure ongoing compliance with these standards to retain their registration. For example, agents must notify the Board of any changes in their business structure, financial status, or personal circumstances that might affect their eligibility for registration. Failure to do so can result in disciplinary action, including suspension or termination of their registration. Breaches of the Act, such as failing to comply with the code of professional conduct, can result in severe consequences. Under section 40-110, the Board can terminate a tax agent's registration, effectively barring the agent from practising as a tax agent in Australia. Additionally, under section 40-160, the Board can suspend a registration for a period not exceeding one year if the agent has failed to comply with the code of professional conduct. Failure to comply with the Act can also lead to civil or criminal penalties, including fines and imprisonment, as outlined in sections 40-180 and 40-190. The maximum penalties for serious breaches can reach up to $66,000 for individuals and $330,000 for corporations, reflecting the seriousness with which the Act treats non-compliance.