A tax agent who amended tax returns without consulting his clients, failed to pay personal tax debts and misled members of the board has seen the TPB’s decision to terminate his registration upheld by the Administrative Appeals Tribunal.
Tribunal upholds agent’s registration termination for ‘grossly’ misapplying tax law
Brisbane-based tax agent Alan Norman, the principal and sole director of G Norman & Associates Pty Ltd, saw his registration cancelled by the Tax Practitioners Board (TPB) in December 2019 after it found that he was no longer a fit and proper person.
The TPB launched an investigation after an ATO audit of Mr Norman’s affairs discovered a pattern of behaviour “whereby he [had] grossly misapplied the taxation laws and/or displayed indifference as to whether statements made to the commissioner on behalf of his clients are true and correct”.
The ATO found that Mr Norman had made high-risk deduction claims in the tax returns of various paramedics. Based on information it had procured from the Queensland Ambulance Service, the Tax Office notified Mr Norman that his clients weren’t entitled to swathes of the deductions he had claimed on their behalf.
As a result of its audit, the ATO advised Mr Norman that it had discovered “significant errors” in the tax returns of 10 of his clients, including undue vehicle expenses, unsubstantiated travel and uniform expenses, phone and internet expenses, private rental expenses, gifts and donations, and other unsubstantiated rental income expenses.
The ATO then ordered that “100 per cent” of the tax returns filed by Mr Norman on behalf of his clients be amended, before referring the case to the TPB.
Through its investigation of Mr Norman, launched in August 2019, the TPB found that he had failed to disclose overdue personal tax debts in annual declarations spanning 2017 and 2018, along with personal tax debts in his application for the renewal of his company’s registration in 2019.
The investigation also found that he provided false or misleading information to board members of the TPB, in addition to failing to lodge business activity statements between 2014 and 2018, and defaulting on debt repayment arrangements with the ATO, as well as amending his clients’ tax returns without consulting them.
In October 2019, Mr Norman applied to the TPB for special consideration on medical grounds, pointing to a 2017 Parkinson’s disease diagnosis and prolonged periods of absence of the office at the direction from his neurologist — followed by a heart surgery — as factors that contributed to his professional missteps.
In his application, Mr Norman offered detailed explanations and reasoning for his “high-risk” deduction claims, in most cases citing unawareness and a technical lack of knowledge of the technicalities that in most cases had rendered his clients’ claims invalid.
Pleading ignorance on expenses related to meals, overtime and even travel, Mr Norman said he “had no reason to doubt the validity of these claims”.
“It wasn’t until I received official notification from the ATO, where I was advised that, in fact, QAS had not included these allowances in the gross salary amounts on the annual PAYG summaries,” he said.
Addressing the amendment of his clients’ tax returns without their consent, Mr Norman in 2019 said “nothing was prepared or lodged without client knowledge or consent”.
He later admitted that, because some of his clients lived remotely and were not easily contactable, that he or his staff had in fact altered client tax returns before telling them.
The tribunal found that, as a tax agent, it couldn’t be trusted that his further communications with either the TPB or the ATO could be trusted, and that he therefore was no longer a fit and proper person, upholding the TPB’s decision to terminate his registration.
“Misleading the TPB in official declaration forms, failing to properly advise clients, and failing to take responsibility for his actions, reflects poorly on Mr Norman’s character,” said AAT member Dominique Grigg. “This conduct is unacceptable of a registered tax agent and warrants a deregistration.”
Overturning the TPB’s move for a four-year prohibition, the tribunal decided that a two-year ban was “more appropriate” and will be eligible for review.