Tax agent deregistered after overlooking personal affairs
In the recent matter of Madz and Tax Practitioners Board [2019] AATA 4773, the Administrative Appeals Tribunal upheld a decision of the Board after it cancelled a tax agent’s registration for overlooking his personal affairs.
Mr Stephen Madz was a tax practitioner, who in May 2019 had his registration terminated by the Tax Practitioners Board for breaching the Code of Professional Conduct pursuant to section 30-30 of the Tax Services Act 2009. Mr Madz was also prevented from applying for registration for a period of 18 months pursuant to section 40-25(1) TASA. Mr Madz subsequently applied to the AAT seeking that he be reinstated.
In doing so, Mr Madz contended that his failure to lodge two income tax returns was the result of a ‘perfect storm’ of events, which ensued after he moved house in November 2015. Namely, upon his move, Mr Madz had no telecommunications facilities for 57 days and thereafter, continued to suffer poor connectivity until early November 2019. Further, there was a period in which Mr Madz did not receive mail from the ATO, as it was being sent to his former address. Mr Madz emphasized that he continued to lodge his clients returns during this period.
The Tribunal accepted that Mr Madz had serious telecommunications difficulties which affected his ability to conduct his business after his move. In doing so, it acknowledged that this resulted in him reasonably prioritising meeting the needs of his clients and the requirement of the ATO in relation to those clients.
However the Tribunal relied on Su v Tax Agent’s Board of South Australia (1982) 13 AR 192, noting that this could not excuse his failure to appropriately conduct his own affairs. In Su, the court noted that:
“If a doctor is convicted of a serious offence relating to drugs, his name may be struck from the register because the offence is inconsistent with the task which medical practitioners perform. If a tax agent is convicted of an offence of tax evasion, his name may be taken from the register, for tax evasion is inconsistent with the role which tax agents are called upon to perform.”
As such, the Tribunal held that the Board was justified in cancelling Mr Madz’s registration, noting that his non compliance was exacerbated by his failure to comply with an Outstanding Lodgement Order issued by the ATO pursued to s 30-20 of the code and that the outstanding returns and BAS’s had still not been lodged by the date of the hearing.
Despite this, the Tribunal reduced the period for which Mr Madz was prohibited from reapplying for registration from 18 months to 12 months.
