Ho and Tax Practitioners Board (Practice and procedure) [2025] ARTA 2379 | Case summary

Ho and Tax Practitioners Board (Practice and procedure) [2025] ARTA 2379 | Case summary | Zoe

[22]

In July 2023, the Commissioner advised Mr Ho that Easy Pay had been selected for a goods and services tax (GST) review for the period 1 April 2023 to 30 June 2023. At the end of that review the matter was referred to audit and the period expanded to include 1 July 2017 to 17 November 2023.
At the conclusion of the audit, the Commissioner issued a Notice of Amended Assessment of Net Amounts, which gave rise to a debt of $67,936,654.00 together with a Notice of Assessment for Shortfall Penalties, which gave rise to a debt $61,142,692.05.
The Commissioner amended the assessments outside the statutory time limit as he formed an opinion there had been fraud or evasion in the relevant BAS. Objective evidence obtained from third parties did not match up with the invoices provided by the taxpayer[2] and some suppliers had no records of the purported transactions[3]. The Commissioner inferred from the totality of the circumstances that Mr Ho and others working for him, dishonestly and deliberately claimed false GST refunds.
The Commissioner also determined that Easy Pay, in overstating the input tax credits, made a 'false or misleading statement in a material particular' and took a position that was 'not reasonably arguable' giving rise to an administrative penalty. The Commissioner determined the behaviour of the taxpayer at the time of making the false or misleading statement demonstrated intentional disregard of the taxation law and imposed a penalty at 75% of the shortfall amount. An important factor in assessing the behaviour at this level was Mr Ho's position as a registered tax agent. An uplift of 20% was also imposed as the penalty applied to later income years.
In July 2024 Easy Pay lodged an objection to the Notices of Amended Assessment of Net Amount and Penalty Assessments. The Commissioner disallowed the objection in full.
At the time of the stay hearing, Easy Pay had not lodged an appeal or a review of the Commissioner's objection decision. The Tribunal was advised the taxpayer intended on doing so.
Easy Pay's debt was due and payable once the Notices of Assessment of Net Amounts and Penalty Assessments were issued. The debt has not been paid or the subject of a payment arrangement between Easy Pay and the Commissioner.
Easy Pay failed to lodge income tax returns for the income years ended 30 June 2018, 30 June 2019, 30 June 2021 and 30 June 2023 by their respective due dates.
Easy Pay failed to lodge BAS for the monthly periods ended 31 December 2012, 31 January 2024, 29 February 2024 and 31 March 2024 by their respective due dates.
Easy Pay failed to pay an outstanding Superannuation Guarantee Employee debt of $9,458.03 by the due date or otherwise enter into an agreement with the Commissioner.

[24]

Tickets Portal Pty Ltd failed to lodged monthly BAS for the periods ended 30 November 2020, 30 June 2021, 31 May 2022, 30 June 2022, 31 August 2022, 30 September 2022, 31 October 2022, 30 November 2022, 31 March 2023, 30 September 2023, 31 October 2023, 30 November 2023, 31 January 2024, 29 February 2024 and 31 March 2024. The company also failed to file its income tax return for the year ended 30 June 2023 by the due date.
Rick Parsons Pty Ltd failed to lodge quarterly BAS for the periods ended 30 September 2019, 31 December 2019, 31 March 2020, 30 June 2020, 30 September 2020, 31 December 2020, 31 September 2021, 30 June 2022, 31 December 2022, 31 March 2023, 30 June 2023 and 31 December 2023 by their respective due dates. The company also failed to lodge its income tax returns for the years of income ended 30 June 2021, 30 June 2022 and 30 June 2023 by their respective due dates.
Start Travel Group Pty Ltd failed to lodge quarterly BAS for the periods ended 31 March 2019, September 2021, 30 September 2022, 31 December 2022, 31 March 2023, 30 June 2023, 30 September 2023 and 31 December 2023 by their respective due dates. The company also failed to lodge its income tax returns for the years of income ended 30 June 2018, 30 June 2019, 30 June 2020 and 30 June 2022 and pay an outstanding Integrated Client Account debt of $4,559.00 by the respective due date.
Transglobal Travel Services Pty Ltd failed to lodge monthly instalment activity statements (IAS) for the periods ended 30 January 2020, 29 February 2020, 31 May 2021, 31 August 2021, 31 October 2021, 30 November 2021, 31 January 2022, 31 May 2022, 31 July 2022, 31 August 2022, 21 October 2022, 30 November 2022, 31 May 2023, 31 July 2023, 31 August 2023, 31 October 2023, 30 November 2023 and 31 January 2024 by their respective due dates. Transglobal Pty Ltd failed to lodge quarterly BAS statements for the periods ending 30 September 2021, 30 June 2022, 30 September 2022, 31 March 2023, 30 June 2023, 30 September 2023 and 31 December 2023 by their respective dure dates. The company also failed to lodge its income tax returns for the years of income ended 30 June 2019, 30 June 2020,30 June 2022 and 30 June 2023 by their respective due dates.
We Travel Group Pty Ltd failed to lodge monthly BAS for the periods ended 31 December 2020, 31 March 2021, 30 June 2021, 30 September 2021, 30 June 2022, 31 December 2022, 31 March 2023, 30 June 2023 and 31 December 2023 by their respective due dates. The company also failed to lodge its income tax returns for the years of income ended 30 June 2017, 30 June 2018, 30 June 2020, 30 June 2022 and 30 June 2023 by their respective due dates.
Tickets Plus Group Pty Ltd failed to lodge monthly BAS for the periods ended 31 December 2019, 30 September 2020, 31 March 2021, 30 June 2021, 30 September 2021, 30 June 2022, 30 September 2022, 31 December 2022, 31 March 2023, 30 June 2023, 30 September 2023 and 31 December 2023 by their respective due dates.
Transglobal Tours Pty Ltd failed to lodge quarterly BAS for the periods ended 31 December 2019, 31 March 2020, 30 June 2020, 30 September 2020, 31 March 2021, 30 June 2021, 30 September 2021, 31 December 2021, 30 June 2022, 30 September 2022, 31 December 2022, 31 March 2023, 30 June 2023, 30 September 2023 and 31 December 2023 by their respective due dates.
Opulence College Pty Ltd failed to lodge quarterly BAS for the periods ended 30 June 2021, 30 June 2022, 30 September 2022, 31 December 2022, 31 March 2023, 30 June 2023, 30 September 2023 31 December 2023 by their respective due dates. The company failed to lodge its income tax returns for the years of income ended 30 June 2022 and 30 June 2023 by their respective due dates. The company also failed to pay and outstanding income tax debt of $8917.25 by its due date or enter into an arrangement with the Commissioner.
Pacific Blue Cruise Pty Ltd failed to lodge quarterly BAS for the periods ended 30 June 2020, 30 September 2021, 31 December 2021, 31 March 2022, 30 June 2022, 31 December 2022, 31 March 2023, 30 June 2023, 30 September 2023 and 31 December 2023 by their respective due dates. The company also failed to lodge its income tax returns for the years of income ended 30 June 2022 and 30 June 2023 by their respective due dates.

[26]

(a) Mr Ho had breached subsections 30-10(1), 30-10(2) and 30-10(11) of the Code of Professional Conduct in the Tax Agent Services Act 2009 (Cth) (the Code) and had ceased to meet the tax practitioner registration requirement that he is a fit and proper person as required under paragraph 20-5(1) of the Tax Agent Services Act 2009 (TASA). In general terms this was a consequence of: > > > (i) Failing to declare all reportable and accessible income as required in his personal income tax returns lodged with the Commissioner for the years of income ending 30 June 2020 to 30 June 2023. Mr Ho declared a total accessible income of $682,420.00 when the actual reportable income assessed by the Commissioner was $7,746,751,00 creating a tax shortfall of $3,425,195.15; > > > > (ii) Making false or misleading statements to the Commissioner in relation to BAS lodged for Easy Pay for the period 1 July 2017 to 17 November 2023, when he would have either have known or ought to have known that the input tax credits claimed were not allowable, resulting in a net shortfall of $67,936,654.00 and a penalty of $61,142,692.05; > > > > (iii) Making a false statement in his application for renewal of his tax agent registration lodged with the Respondent on 21 March 2021 by representing that neither he nor any of his related entities had any overdue tax obligations, when in fact as at that date, Mr Ho in his capacity as a sole director of two companies had seven (7) BAS outstanding; > > > > (iv) Making a false statement in the application for renewal of the tax agent registration of Pearson lodged on behalf of the company with the Respondent on 21 June 2021 by representing that neither Mr Ho nor any of his related entities had any overdue tax obligations when in fact as at that date Mr Ho in his capacity as a sole director of three (3) companies had nine (9) BAS outstanding; > > > > (v) Failing to comply with the taxation laws in his capacity as a sole director of eight (8) companies and a joint director of two (2) companies by causing them to fail to lodge their BAS, IAS and income tax returns by their respective due dates and in his capacity as a director, causing three (3) companies to fail to pay taxation liabilities as and when they fell due; > > > > (vi) Obstructing the Commissioner from finding out about the true shortfall amount associated with his income tax returns for the income years ended 30 June 2020 to 30 June 2023 and the BAS lodgements for Easy Pay between 1 July 2017 to 17 November 2023 in his capacity a as sole director. > > (b) Pierson had breached subsections 30-10(1) of the Code and had ceased to meet the tax practitioner's registration requirements that each of its directors be a fit and proper person as required under paragraph 20-5(3) of the TASA and, in making a false and misleading statement by Mr Ho representing that neither he nor any of his related entities had any overdue tax obligations when as at that date Mr Ho in his capacity as a sole director of two companies had seven (7) BAS outstanding;

[28]

The object of the TASA is set out in Section 2-5(1) as states that it is to support public trust and confidence in the integrity of the tax profession and system by ensuring that tax agent services are provided to the public in accordance with appropriate standards of professional and ethical conduct.
This is achieved in part, through the registration and regulation of entities that provide tax agent services by the Respondent, the Code for registered tax agents ad sanctions to discipline entities in relation to their conduct as registered tax or BAS agents or where services are provided other than in accordance with the TASA.[4]
For an individual to be eligible for registration as a tax agent, the Respondent must be satisfied that each director is a fit and proper person.[5] In determining whether an individual is a fit and proper person, the Board must have regard to the matters set out in section 20-15 of the TASA which relevantly include 'whether the individual is of good fame, integrity and character'.
For a company to be eligible for registration as a tax agent, the Respondent must be satisfied that each director is a fit and proper person.[6]
In the case of a company, there is a further requirement for registration that there be a sufficient number of individuals being registered tax agents to provide tax agent services to a competent standard and to carry out supervisory arrangements.[7]
These provisions as supported by the Code which includes an obligation that a registered tax agent must 'act honestly and with integrity', comply with the taxation laws in the conduct of personal affairs and not knowingly obstruct the proper administration of the taxation laws.[8]
It is accepted that the term 'personal affairs' includes any associated entities of the tax agent including companies, partnerships, trusts that the tax agent has direct or indirect control over.[9]
The Respondent is empowered via subdivision E of the TASA[10] to undertake an investigation into conduct that may be a breach of the Act. Upon completion of an investigation, if the Respondent finds the conduct breaches the TASA, the Respondent must either make a decision to take no further action or do one or more of items set out in sections

[39]

In respect of Mr Ho, the Respondents decision is based upon three courses of conduct; the failure to comply with taxation laws in his own right and in his capacity as a company director, the false and misleading statements included in the registration renewal applications for himself and Pierson and dishonest conduct underpinning the assessments arising from the Commissioners compliance activity of Mr Ho and Easy Pay. The conduct is also relevant to the decision in respect of Pierson.
The Applicants do not dispute some aspects of the conduct upon which Respondent's decision was based. In particular, the misleading statements in the renewal applications together with the late lodgements and payments. At the stay hearing, the Applicant argued this alone would not support termination of the tax agent registrations. The Respondent disagreed.
False declarations to the Respondent, even those that are inadvertent or as a result of mitigating factors, have the potential to undermine the confidence in the registration process.[26] The conduct of the Applicants should therefore be viewed in this context. Even if the Tribunal were satisfied after a final hearing the actions were reckless or indifferent, it will still amount to misconduct.
Mr. Ho, in the course of the Respondent's investigation, stated that to the extent there was non-compliance, this was as a result of unforeseen personal and professional challenges which impacted on his ability to meet the taxation obligations across multiple entities. He further stated that steps had been taken to ensure compliance moving forward.
The evidence before the Tribunal suggests that compliance with taxation obligations remains an ongoing issue. Several entities had outstanding lodgements which were only brought up to date the day before the stay hearing and Easy Pay and Tickets Portal Pty Ltd still had outstanding lodgements. The Tribunal was advised that Mr Ho and Easy Pay's taxation debts are outstanding and payment arrangement is not in place[27]. Mr Ho as the sole director of Easy Pay and Tickets Portal Pty Ltd is currently in breach of his obligations under the relevant tax laws. These are matters which will undermine any argument at a final hearing that the poor lodgement and payment history was isolated or minor in nature.
In any event, the Applicants prospects of success in the review turns upon Mr Ho displacing the Commissioner's findings that he did not engage in fraudulent, misleading or otherwise reckless conduct in respect of his taxation obligations in his own right or in his capacity as the director of Easy Pay.
I observe that in relation to Mr Ho's objection to his personal taxation liabilities, the evidence provided to the Tribunal is relatively thin. The Tribunal has the benefit of the objection forms and Second Witness Statement of Mr Gu confirms that evidence has been provided to the Commissioner in support of the objection grounds.
Notwithstanding this, I acknowledge the covert nature of the audit and that Mr Ho is engaging with the Commissioner through the objection process. This engagement, and in particular the provision of further evidence, may provide a basis for a different outcome in respect of his personal assessments which may have some consequences for the conduct underpinning the Respondents decisions.
In respect of Easy Pay, the Notices of Assessments of Net Amounts and Penalty Assessment were raised at the conclusion of an overt audit and the taxpayer has (unsuccessfully) exercised their objection rights. Although I am advised the decision is likely to be appealed to the Federal Court, this had not occurred at the time of the stay hearing and no evidence was provided as to the potential grounds of appeal.
GST is a transactional tax and claims for input tax credits can, and should, be supported by contemporaneous records such as tax invoices and bank statements. Critical to the Commissioner's decision at both audit and objection was significant discrepancies between independent evidence obtained from third parties and the material provided by the taxpayer. The Commissioner concluded there had been fraud or evasion.
Easy Pay has had the benefit of a comprehensive audit and objection and the dispute is well advanced. In order to be successful on appeal or review, it will be necessary for the taxpayer to prove the various assessments were excessive and what they should be. This will require Mr Ho to explain the significant discrepancies between the third party evidence and the taxpayer's records. It will also be necessary for the taxpayer to substantiate all the input tax credits claimed. Discharging the onus on appeal will be difficult and I have not been able to form an impression on the material before me they will be able to do so.
Even if the Tribunal were to accept that Mr Ho has some prospects in respect of his personal tax liabilities, in order to have some prospects of success in the substantive reviews he will need to be substantially, if not wholly, successful in both disputes with the Commissioner.
In circumstances where some of the conduct which underpins the Respondent decision is not contested and the Applicants also require the Commissioner's findings in respect to Mr Ho's conduct to be completely reversed, I have not been persuaded that the Applicants have good prospects in the reviews. This weighs against the granting of a stay.

[42]

The Respondent is a statutory body tasked with administering the TASA. The purpose of the TASA is to ensure that tax agent services are provided to the community in accordance with appropriate standards of professional and ethical conduct there is a public interest in maintaining the standards which the respondent does by administering the TASA under which the decisions were made.
The Applicants argued that the public interest is served by allowing Pierson to continue to provide taxation services to its large client base and to continue to employ its staff. They also argue there is a public interest in Mr Ho being able to carry out his entrepreneurial activities associated with his varied businesses.
In respect of any risk, the Applicants contend this is limited in circumstances where there was no suggestion that the Applicants has misconducted themselves in attending to the tax affairs of their clients, the conduct identified by the Commissioner at audit was historical in nature and Mr Ho has taken steps to ensure compliance moving forward.
For the Applicants to describe the conduct as 'historical' is extraordinary in the circumstances. Compliance activity necessarily reviews activities in the past and therefore the currency of the behaviour needs to be viewed in this context. To depict the activities of Mr Ho in this way improperly minimises the severity of the conduct which occurred over a prolonged period of time and involved very substantial tax liabilities. It is also contrary to the evidence before the Tribunal which suggests that Mr Ho has failed to meet his ongoing obligations in respect of lodgement and payment subsequent to the Respondent's decision.
I acknowledge the Applicants' argument that the tax agent services provided by Pierson and Mr Ho have not been impugned as part of the Respondent's findings. The Applicant also argues that in circumstances where the Respondent has simply adopted the Commissioner's findings is a matter that weighs in favour of granting the conditional stay. This is because there is a real risk that the Respondent acted prematurely by making the relevant decisions before the taxation dispute had run its course.
It was contended by the Respondent that the public interest is an overriding consideration, and that the Tribunal should take into account the objects of the regulatory regime underpinning the decisions when forming an opinion about whether to grant a stay.
In Australian Securities and Investment Commission v the Administrative Appeal Tribunal [2009] 181 FCR, the Court held that in balancing interests that are competing, priority must be given to those whose interests are protected in the statutory scheme. [28] The protection of the public and taxpayers from people who are not fit and proper to provide tax agent services and to ensuring the integrity of the system is a central purpose of the TASA.
In this case there is an obvious tension between the Applicants being afforded a reasonable opportunity to dispute the Commissioner's findings arising from the compliance activity without adverse consequences, and the public interest.
It is not accurate to say the Respondent simply adopted the Commissioner's findings. The Applicants were given an opportunity to make submissions prior to the decisions being made, and in any event the decisions were not solely based on the Commissioner's findings from the compliance activity.
The Commissioner is responsible for administering the taxation system and ensuring taxpayers meet their taxation obligations. He carries out this function, in part, through compliance activity. He is best placed to determine whether a taxpayer is compliant with the tax law.
The Commissioner's findings were made at the conclusion of an audit process and after a detailed consideration of the facts and evidence. As a general proposition, the Commissioner accepts that findings of fraud and evasion are serious and on that basis are not made lightly.[29] It is therefore not unreasonable for the Respondent to be persuaded by, or rely upon the Commissioner's findings in carrying out its functions.
Although Mr Ho is actively pursuing his review rights, the severity of the conduct identified by the Commissioner, especially in respect of Easy Pay, and the associated risk cannot be ignored. The Commissioner determined after an audit and objection that Mr Ho had facilitated the falsification and manipulation of records in order to obtain more than $60 million in refunds.
As the Tribunal stated in Evans and Tax Practitioners Board [2019] AATA 1408 at 131

Ho and Tax Practitioners Board (Practice and procedure) [2025] ARTA 2379 (19 March 2025)

At a glance

Court

Decision date

Source

Judgment (64 paragraphs)

Ho and Tax Practitioners Board (Practice and procedure) [2025] ARTA 2379 (19 March 2025)

Legislation Cited (4)

Cases Cited (1)