Unpaid Tax Liability Can Lead To The Cancellation Of Tax Agent Registration?

Q&A Tax

Question :

Adam is a charted accountant and the principal of the accounting firm. While he had 30 years’
experience as a tax agent, he now has an outstanding personal taxation liability of
approximately $300,000. He also did not disclose his outstanding ATO debts as well as the outstanding
income tax return and BAS lodgement obligations to the Tax Practitioners Board.

The TPB then subsequently terminated his registration as a tax agent as he would not be regarded as a
fit and proper person.

What’s a ‘fit and proper person’ according to TPB? What’s the rationale behind this case?

 

Answer :

Criteria for determining whether an individual is a ‘fit and proper person’

The Board must have regard to whether the individual:

1. is of good fame, integrity and character; and
2. at any time during the previous five years:

a. has not been convicted or otherwise sanctioned for a serious taxation offence, or certain other
kinds of tax-related misconduct;
b. had not the status of an undischarged bankrupt
c. did not serve a term of imprisonment, in whole or in part.

The main reason TPB terminated the registration is that Adam is not eligible to register as a tax agent.

Eligibility for registration as a tax agent — individuals

The Board must be satisfied that the individual:

1. is a fit and proper person; and
2. meets the requirements prescribed by the regulations — including, but not limited to, requirements
relating to qualifications and experience.

Thus, tax agents must make sure to fulfil their own tax obligations before doing their client’s job

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