Tax agent found guilty of TASA breach

The Federal Court has declared a NSW man breached the Tax Agent Services Act 2009 (TASA) by recklessly making statements to the commissioner of taxation that were false, incorrect or misleading.

The Court last week declared that between August and September 2011, Cheng Cheng Li of Sydney, a registered tax agent, prepared and lodged 90 individual income tax returns based on information he received from two people representing themselves as staff from a recruitment agency.

According to a Tax Practitioners Board (TPB) statement released following the Federal Court decision, Mr Li did not have any dealings with the individual taxpayers, and did not seek any declarations from them stating that the information provided to him was true and correct. Nor did he take any steps to verify any of the information supplied to him, even though he had access to the tax agent portal to check payment summaries and taxpayer information.

The TPB terminated Mr Li’s registration in August 2013 and banned him from reapplying for registration for three years.

Despite a petition from the TPB, however, the Federal Court last week imposed no pecuniary penalty on Mr Li.

In his decision the judge, Justice Edmonds, said, “The loss of his registration and the costs order he will have to meet as a result of this proceeding are such that he should not be subjected to any further penalty. The seriousness of Mr Li’s contraventions, as a single course of conduct, do not warrant subjugating Mr Li, his wife, their children and the wider family they provide and care for, to any greater financial deprivation going forward.”

The Court did, however, make an order requiring Mr Li to pay the TPB’s costs.

Ian Taylor, chair of the TPB, said the board takes seriously any conduct that calls into question an agent’s integrity and competence.

“It is the responsibility of all registered tax practitioners to take reasonable care to ensure the information provided by their client is accurate. They need to ask questions, consider the answers, and form a professional judgement.

“There are serious consequences for registered agents who breach the Tax Agent Services Act 2009 and the Code of Professional Conduct,” Mr Taylor said.

 

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