Tax Agent supsension over work expense claims

Has your tax agent ever tried to claim certain expenses as work related but it really wasn’t? Or are you an agent that does these sorts of practices?


While it may seem worth it to try and find loopholes in the system, it actually does not benefit the customer or the agent to do so.


Not only is it morally and ethically wrong, between June to August 2018, the Australian Tax Practitioner’s Board’s Board Conduct Committee has started to not only warn, but also suspend agents who do such practices.


Between those 3 months, 24 written warnings have already been handed up to practitioners, 25 orders have been served, as well as 3 suspensions and 7 termination of registrations. The committee has furthermore rejected 4 applicants who applied for a registration of renewal because these practitioners no longer met the eligibility requirements for registration.


Ten tax practitioners have also been warned for various breaches to the Code of Professional Conduct. The Board Conduct Committee found that seven of these tax practitioners had failed to provide competent tax agent services, including some of the below:


·         Failing to ensure their practice had the correct processes and procedures implemented to prevent any security breaches and unauthorised access to ATO portals

·         Failure to provide adequate trust account management arrangements to ensure that the clients tax returns were lodged in a timely manner

·         Failure to contact their clients in a timely manner to have them review and sign their tax returns for lodgement in a timely manner

·         Failure to correctly supervise and control, leading to incorrect claims and deductions to be made.

·         Failure to comply with tax laws relating to work-related expense claims

·         Failure to pass on any correspondence from the ATO to their clients.


Other code breaches that received warnings also included:


·         Failure to act ethically when handling the client’s bank account information for the sole purpose of holding and disbursing client tax refunds

·         Failure to declare their non-compliance with personal tax obligations in their annual declarations

·         Failure to comply with personal tax obligations

·         Failure to maintain confidentiality within the firm, such as disclosing private information of clients to third-parties without the client’s knowledge or consent

·         Failure to ask sufficient questions regarding to their clients’ work-related expenses which can result in trouble for the client’s tax lodgements

·         Failure to ensure that taxation laws were applied correctly to any lodgements and returns

·         Failure to meet the TPB’s requirements regarding professional indemnity

·         Failing to respond to the Board’s requests for any information in a timely and reasonable manner.

In terms of the suspension of the three tax practitioners during this period, two were suspended as they continued to non-comply with their personal tax obligations despite various warnings and requests that had already been issued by TPB’s Board Conduct Committee.


The third practitioner had been claiming incorrect and inappropriate work-related expenses for several of their clients which had resulted in a temporary suspension of four months and has also been imposed to complete compulsory education courses during the suspension.

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