The TPB’s board conduct committee decisions for June to August have resulted in three suspensions, including two for practitioners failing to comply with their personal tax obligations.
The third, a four-month suspension, was meted out after the TPB found that a tax agent had claimed significant travel and other work-related expense deductions in several of his clients’ tax returns.
ATO audits revealed these expenses were clearly not deductible on the basis that they were private in nature, did not satisfy ATO rules for claiming deductions or were not adequately substantiated by supporting evidence.
The committee found that the agent had failed to take reasonable care in ascertaining the state of affairs of his clients by asking sufficient or pertinent questions regarding work-related expenses, and sighting the necessary evidence; ensure that taxation laws were applied correctly to his client’s circumstances; and properly advise his clients of their rights and obligations by not informing them of ATO audits and their outcomes.
The TPB noted the agent maintained his position regarding the validity of his claims in his clients’ tax returns and did not take any steps to improve his knowledge on work-related expense deductions.
Along with his four month suspension, the TPB have imposed an order requiring the agent to complete and pass courses of education in income tax preparation and lodgment; and provide the board with evidence of the CPE activities he has completed.
The results of the board’s decisions come after increased focus from the ATO on work-related expenses following the release of its $8.76 billion individual tax gap report.
The ATO has also circled a small number of 500 agents who fail to go by the law, and will be contacting them over the next 12 months.