(d) Exhibit R4 - Affidavit of Carl Collits filed 5 March 2021.

1. The Tribunal has jurisdiction to review the Reviewable Decisions pursuant to section 25 of the Administrative Appeals Tribunal Act 1975 (Cth) ('AAT Act') and sub-section 70-10(e) of the TASA.
2. The Tribunal has reviewed all the evidence before it and refers to all relevant materials below.

1. The object of the TASA, as stated in section 2-5 is 'to ensure that tax agent services are provided to the public in accordance with appropriate standards of professional and ethical conduct'. This objective is achieved through the registration regime found in Part 2 of the TASA, the Code in Part 3 of the TASA, and a graduated system of sanctions for disciplining tax practitioners.

1. The TASA establishes the Tax Practitioners Board ('TPB') and provides for the registration and regulation of tax agents. Part 2 of the TASA contains the registration regime that applies to all entities who provide tax agent services. The term 'tax practitioner registration requirements' is defined in the dictionary in section 90-1 of the TASA and means 'the matters about which the Board must, under Subdivision 20-A, be satisfied before the Board is obliged to grant an application for registration under this Act'. Being a 'fit and proper person' is a 'tax practitioner registration requirement'. Paragraph 20-5(1)(a) of the TASA provides that an individual is eligible for registration as a registered tax agent, BAS agent or tax (financial) adviser if the TPB is satisfied that the individual is a 'fit and proper person'. In determining whether a person is a 'fit and proper person' to be registered as a tax agent, the TPB must, pursuant to paragraph 20-15(a) of the TASA, have regard to whether the individual 'is of good fame, integrity and character'.

1. Part 3 of the TASA contains the Code that applies to all registered tax agents, BAS agents, and tax (financial) advisers. Section 30-10 sets out the Code which includes relevantly:

Honesty and integrity

(1) You must act honestly and with integrity.

(2) You must comply with the taxation laws in the conduct of your personal affairs.

1. In respect of sub-section 30-10(2) of the Code, the term 'taxation law' is defined in section 995-1 of the Income Tax Assessment Act 1997 (Cth) and refers to the TASA and regulations made under the TASA and any Act of which the Commissioner of Taxation has general administration (for example, the Income Tax Assessment Act 1936 (Cth), Income Tax Assessment Act 1997 (Cth), A New Tax System (Goods and Services Tax) Act 1999 (Cth) and the Taxation Administration Act 1953 (Cth), and any regulations made under those Acts).
2. The term 'personal affairs' includes a tax practitioner's practice and the affairs of all associated entities that the tax practitioner has direct or indirect control over.[5]

1. Section 30-15 provides that if the TPB is satisfied, after conducting an investigation under Subdivision 60-E, that the agent has failed to comply with the Code, then the TPB may do one or more of the following:

(c) suspend the agent's registration under section 30-25; and

(d) terminate the agent's registration under section 30-30.

1. Paragraph 40-5(1)(b) provides that the TPB may terminate the registration of a registered tax agent who is an individual if they cease to meet one of the tax practitioner registration requirements.

1. Sub-section 40-25(1) of the TASA provides that if the TPB terminates an agent's registration, it may impose a period of not more than five years during which an agent may not apply for registration.

1. The issues for the Tribunal are as follows:
   1. whether the Applicant breached sub-sections 30-10(1) and 30-10(2) of the Code;
   2. whether the Applicant is a 'fit and proper person' within the meaning of paragraph 20-5(1)(a) of the TASA;
   3. whether the termination of the Applicant's registration as a tax agent pursuant to paragraph 40-5(1)(b) of the TASA is appropriate; and
   4. whether the determination pursuant to sub-section 40-25(1) of the TASA that the Applicant may not apply for registration for a period of 18 months is appropriate.

1. On 26 September 2017, WTM Financial Services Pty Ltd ('the Company') was registered as a company tax (financial) adviser with registration number 25683806.[6] The Applicant is the sole director of the Company.[7]
2. On 26 October 2018, the Australian Taxation Office (ATO) completed an audit of the Applicant's superannuation guarantee obligations.[8]
3. On 26 November 2018, the ATO made a referral to the Respondent[9] regarding the conduct of the Applicant for:

(a) not meeting his superannuation guarantee obligations for the period 1 January 2017 to 30 June 2018;[10]

(b) failing to lodge 22 business activity statements (BAS) since January 2017;[11] and

(c) defaulting on over 20 payment arrangements since 2002.[12]

1. On 17 January 2019, the Respondent issued a letter to the Applicant regarding his conduct the subject of the ATO referral.[13] A written response addressing what caused non-compliance with his tax obligations, and what actions he had taken and intended to take to resolve his tax compliance issues was required by 31 January 2019.
2. On the same day, the Applicant responded to the Respondent, stating that he had commenced lodging his outstanding documents and would respond in full by 25 January 2019.[14]
3. On 1 February 2019, the Applicant responded to the Respondent providing explanations for the non-compliance with his tax obligations.[15]
4. On 3 September 2019, the Respondent commenced an investigation into the Applicant's conduct pursuant to Subdivision 60-E of the TASA.[16]
5. On 22 October 2019, the Respondent issued a 'Notice of alleged breach' letter to the Applicant attaching a submission to the Respondent's Conduct Committee.[17] A response from the Applicant was requested by 5 November 2019.
6. As at 30 January 2020, no response had been provided by the Applicant to the Respondent's letter of 22 October 2019.
7. On 30 January 2020, the Respondent made findings that the Applicant had breached sub-section 30-10(1) of the Code, in that he failed to act honestly and with integrity by lodging an application for renewal of his tax agent registration on 1 August 2019 declaring that he had no overdue personal taxation obligations,[18] when in fact:

(a) in his capacity as the Trustee for the WT Martin & Associates Staff Super Fund ('Super Fund') he had failed to lodge BAS for the periods from 1 July 2016 to 30 June 2019; and

(b) in his capacity as the Trustee for the Elsewhere Trust ('the Trust'), he had failed to pay an overdue Integrated Client Account (ICA) debt of $2,075.95.

1. The Applicant was questioned about these matters during cross-examination at the hearing. He stated that he understood that he did not need to lodge a BAS in respect of the Super Fund as it was no longer in existence and had closed in 2009.[19] The BAS lodged for the Super Fund up until June 2015 were done by Rod Chippindale, who sold the practice to the Applicant when he retired. The BAS that were lodged after the Super Fund closed were nil returns.[20]
2. In relation to the Trust, the Applicant told the Tribunal that after he lodged his application for renewal of his registration on 1 August 2019, he became aware that he had not lodged a BAS in respect of the Trust.[21] When he realised he had 'made a genuine mistake' he lodged the BAS on the same day. He would not have signed the declaration in the renewal application knowing he had not lodged the BAS.[22] He acknowledged that he was aware at the time that the Trust was indebted to the ATO in the sum of a couple of thousand dollars, and that the lodgement would have increased the amount he owed by a couple of hundred dollars, but he 'overlooked' the Trust completely.[23] He agreed that once he became aware that he had mis-stated on the declaration on his renewal application that he did not have any overdue tax obligations that he should have corrected it, but he did not do so.[24] He thought that lodging the BAS was all that he needed to do, and that is what he did. If he knew that an amount had to be paid he would have paid it, or answered the question differently. [25] He did not 'knowingly and falsely submit something to say that there was [not] an amount outstanding' he 'just overlooked it'.[26]
3. The Respondent further found that the Applicant had breached sub-section 30-10(2) of the Code, in that he did not comply with taxation laws in the conduct of his personal affairs by:

(a) failing to lodge two income tax returns (ITRs) for the years ending 30 June 2017 and 30 June 2018 by their respective due dates as follows:[27]

(b) failing to lodge 27 BAS for the monthly tax periods ending 30 September 2016 to 31 July 2019 by their respective due dates as follows:[28]

1. In his oral evidence at the hearing, the Applicant agreed that it was 'quite clear that there was a long period of time' over which he was not 'lodging things on time.' He was 'putting other people in front of [him] over a long period of time.'[29]
2. The Respondent further found that the Applicant had breached sub-section 30-10(2) of the Code, in that he did not comply with the taxation laws in the conduct of his personal affairs by:

(c) failing to meet his superannuation guarantee obligations for six quarterly periods ending 31 March 2017 to 30 June 2018;

(d) failing to pay an overdue ICA debt of $314,887.11 when due and payable to the Commissioner of Taxation ('Commissioner');

(e) failing to pay overdue Superannuation Guarantee Charge (SGC) debt of $64,448.45 when due and payable to the Commissioner;

(f) in his capacity as the Trustee for the Super Fund, failing to cause the Super Fund to lodge 12 BAS for the quarterly periods ending 30 September 2016 to 30 June 2019 by their respective due dates;

(g) in his capacity as the Trustee for the Trust, failing to cause the Trust to pay its overdue ICA debt of $2,075.95 when due and payable to the Commissioner.

1. The Applicant stated in his Statement of Facts, Issues and Contentions that '[t]he late lodgement of Business Activity Statements for myself was me looking after clients and trying to tidy up the practice during the last period of Rod Chippindale owning the practice.' He told the Tribunal that he and Mr Chippindale 'had different views on what needed to be done', and this 'meant that the practice certainly wasn't as profitable as it should have been.'[30]
2. In his Statement of Facts, Issues and Contentions and in his oral evidence, the Applicant explained that about five years ago he provided financial assistance to Frank Dinapoli who had developed a software package for use in the mining industry. His clients loaned him money which he used to assist Mr Dinapoli. He spent over two years 'trying to negotiate and provide accounting and financial information to get the project completed.'[31] When the project 'went pear-shaped' he was liable for the funds, and he needed to take steps to get things sorted. He did manage to do this, but it took a lot of time and was stressful, and it changed his focus away from what he should have been doing in relation to his own taxation obligations and lodgements. He is now 'fully aware' of what he has to do to do the right thing by himself and the registration he holds. He now has 'a much clearer perspective' of what he is doing and is putting himself first and other people second.[32]
3. The Applicant told the Tribunal that he has a very loyal client base in every state of Australia.[33] The firm has existed for more than 50 years and he and Rod Chippindale purchased it 30 years ago.[34] They do not have a high turnover of clients and they do not need to advertise because new clients are referred to him.[35] Three quarters of his clients have been with the firm for more than 15 years, and a good number of them have been clients for more than 30 years. His intention has been to have one of the two younger practitioners in the firm take over from him at some stage.[36] He wants to be able to put something in place so that it doesn't prejudice their situation or that of the clients in terms of providing services and their employment going forward.[37] He told the Tribunal that the firm provides a range of services and he is a registered mortgage broker and therefore the loss of registration would not impact him directly as he has some options.[38]

1. On 20 May 2019, the Applicant entered into a payment arrangement with the ATO for his SGC debt of $68,153.98.[39] After making the first two monthly instalments, the Applicant defaulted on his payment arrangement for his SGC debt.[40] On 2 December 2019, the Applicant entered into a new payment arrangement for his SGC debt of $57,214.02.[41] On 22 July 2020, the payment arrangement commenced on 2 December 2019 for the Applicant's SGC debt was replaced by a new payment arrangement for his SGC debt of $55,147.31.[42] As at the date of the hearing, the Applicant had repaid his SGC debt in full.
2. On 30 November 2019, the Applicant entered into a payment arrangement for his ICA debt of $364,440.04.[43] The Applicant made five monthly instalments of $1,000 and then defaulted on payment on 27 May 2020.[44] On 24 July 2020, the Applicant entered into a new payment arrangement for his ICA debt of $392,776.82.[45] This payment arrangement is currently in place. As at the date of the hearing, the Applicant had an overdue ICA debt of $366,533.37.[46]
3. On 1 July 2020, the Applicant lodged his ITR for the year ended 30 June 2019, which was due on 5 June 2020.[47] The assessment of this ITR resulted in an overdue liability of $3,650.35.[48] On 22 July 2020, the Applicant entered into a payment arrangement for his income tax debt of $3,650.35.[49] The Applicant has completed this payment arrangement.[50]

1. Since the stay order of 13 March 2020, the Applicant has done the following:

(a) on 27 May 2020, he defaulted on his payment plan with the ATO for his ICA debt;[51] and

(b) on 1 July 2020, he lodged late his income tax return for the year ended 30 June 2019, which resulted in an overdue tax liability of $3,650.35.[52]

1. Between 13 March 2020 and 15 February 2021, the Applicant added 66 new clients on his Tax Agent Portal.[53] When this was brought to the Applicant's attention by the Respondent, he responded that 'I thought that was Ok to add these as they are returns associated with current clients'.[54] The Applicant told the Tribunal that this number had now increased to 71 clients, and some of the clients he had added were family members of existing clients, former clients, deceased estates and companies that were directly associated with a client.[55] After discussions with an officer of the Respondent he came to the conclusion that it was okay for him to lodge returns for family members of clients. He agreed that he may have misunderstood the officer in relation to family members of clients, because he would not have done it otherwise.[56] He was 'very, very conscious of not adding anyone' and he sent some potential clients to another tax agent.[57]
2. In relation to the late lodgement of his tax return, the Applicant told the Tribunal that he does not know the reason why it was lodged late and that '[i]t's something that just shouldn't have happened.'[58]

1) Has the Applicant breached sub-sections 30-10(1) and 30-10(2) of the Code?

1. The Respondent contends that the Applicant breached sub-section 30-10(2) of the Code as detailed at paragraphs 31 (a) and (b) and paragraphs 33 (c) to (g) above. In relation to the Applicant's failure to lodge ITR in two successive years ending 30 June 2017 and 30 June 2018 by their respective due dates, the Applicant does not contest that he did not lodge these on time. The Applicant also does not dispute that during the period November 2016 to August 2019 he failed to lodge BAS on time on 27 occasions. The multiple contraventions by the Applicant of his tax obligations were not minor in nature. As the Table in paragraph 31(b) above shows, the delay in lodging BAS frequently extended into hundreds of days and exceeded 600 days on three occasions. The delays in the Applicant's lodgement of his 2017 and 2018 ITR were 261 days and 93 days respectively. In addition to these late lodgements, in his capacity as the Trustee for the Super Fund, the Applicant failed to cause the Super Fund to lodge 12 BAS for the quarterly periods ending 30 September 2016 to 30 June 2019 by their respective due dates (paragraph 33(f)). Most recently, the Applicant lodged his 2019 ITR, which was due on 15 May 2020, on 1 July 2020.[59]
2. In relation to the Applicant's failure to lodge superannuation guarantee charge statements in six consecutive quarters from March 2017 to June 2018, (paragraph 33(c)) the delay in lodging was significant, and lodgement only occurred following an audit conducted by the ATO which resulted in the Applicant incurring a SGC debt of $64,753.50.
3. The Applicant repeatedly defaulted on payment obligations in relation to his personal tax affairs. He failed to pay an overdue ICA debt of $314,887.11 and an overdue SGC debt of $64,448.45 when both were due and payable to the Commissioner as at 21 October 2019 (paragraphs 33(d) and (e)). He further failed in his capacity as trustee for the Trust to pay its outstanding debt which was due and payable on 9 October 2019 (paragraph 33(g)). Following a payment arrangement being made for the repayment of these debts, the Applicant repeatedly defaulted on these payment arrangements (paragraphs 37 and 38).
4. Based on the evidence before it, particularly the multiple failures by the Applicant to lodge BAS for himself and for the Trust of which he is trustee, his failures to lodge income tax returns and superannuation statements, his failures to pay superannuation indebtedness, BAS indebtedness and income tax indebtedness, his failures to pay the indebtedness of the Trust of which he was trustee, and his failure to meet obligations on numerous occasions under payment arrangements, the Tribunal finds that the Applicant breached sub-section 30-10(2) of the Code.
5. The Respondent further contends that the Applicant breached sub-section 30-10(1) of the Code, in that he failed to act honestly and with integrity by lodging an application for renewal of his tax agent registration on 1 August 2019 declaring that he had no overdue personal taxation obligations,[60] when in fact he had tax obligations outstanding. The Applicant's evidence is that when he completed the declaration, he was unaware there were outstanding BAS in relation to the Super Fund of which he was trustee, because he believed it had closed in 2009. In relation to the indebtedness of the Trust as at 1 August 2019, the Applicant lodged the outstanding BAS for the Trust of which he was trustee on the same day he made the declaration. However, he claims that he did not realise that there was existing indebtedness in relation to the Trust and that this would increase as a consequence of the lodgement of the BAS. The Tribunal does not accept that the Applicant was unaware that the Trust had an existing indebtedness and finds that his declaration in his application for renewal of registration that he had no overdue tax obligations was a misrepresentation.
6. Based on the evidence before it, the Tribunal finds that the Applicant was aware when he made the declaration in his application for registration renewal that he had outstanding taxation obligations and therefore by declaring otherwise in the renewal application he breached sub-section 30-10(1) of the Code.

2) Is the Applicant a 'fit and proper person' within the meaning of paragraph 20-5(1)(a) of the TASA?

1. The Respondent contends that the Applicant is not a 'fit and proper person' within the meaning of paragraph 20-5(1)(a) of the TASA because:

(a) the Applicant has made a false and misleading statement to the regulator of his profession;

(b) the Applicant's repeated non-compliance with his personal tax obligations demonstrates a pattern of behaviour that is likely to continue into the future;

(c) the Applicant is not of such competence and integrity that the public may entrust their taxation affairs to his care;

(d) the Applicant failed to take action to resolve the issues with his tax compliance prior to the Respondent's intervention, and continued to breach his personal tax obligations after the application for review was filed and stay granted, demonstrating that he does not take his obligations under taxation laws and the TASA seriously.[61]

1. A determination of whether an individual is a 'fit and proper person' within the meaning of sub-section 20-15(a) of the TASA requires the Tribunal to have regard to, among other things, whether the individual 'is of good fame, integrity and character'.
2. The application of this criterion must be made in the context of the objectives of the TASA. These were recently outlined by Deputy President McCabe in Ridden v Tax Practitioners Board [2020] AATA 422 ('Ridden') at [1]-[3]:

Tax agents play an important role in our community. They assist ordinary taxpayers and businesses to manage their (sometimes complex) tax affairs. Tax agents deal with the Commissioner of Taxation on a client's behalf. Tax agents must exhibit a high level of competence and skill if Australia's self-assessment system is to work efficiently as intended. They must also be trustworthy. There is a strong public interest in ensuring that tax agents are properly regulated.

To that end, Parliament established a regulatory regime for tax agents ... At the heart of the regime is a requirement that a person providing tax agent services must be registered by the Tax Practitioners Board...

A registered tax agent enjoys a privileged position relative to others who are not registered. The privileges associated with registration come with expectations. For example, a person must have appropriate qualifications in order to be registered. The person must also conform to certain rules and standards in order to maintain their registration.

1. In Re Su and Tax Agents' Board of South Australia [1982] AATA 127; (1982) 61 FLR 1 ('Su') Davies J (then President of the Tribunal) set out what is required for a person to be considered fit and proper to manage the income tax returns of a client at [95]:

The function of a tax agent is to prepare and lodge income tax returns for other persons. A person is a fit and proper person to handle the affairs of a client if he is a person of good reputation, has a proper knowledge of taxation laws, is able to prepare income tax returns competently and is able to deal competently with any queries which may be raised by officers of the Taxation Department. He should be a person of such competence and integrity that others may entrust their taxation affairs to his care. He should be a person of such reputation and ability that officers of the Taxation Department may proceed upon the footing that the taxation returns lodged by the agent have been prepared by him honestly and competently.

1. The Applicant's repeated breaches of the Code over a period of several years has an impact on his fame, integrity and character. The Applicant failed to lodge on time his income tax returns in two consecutive years, and 27 consecutive BAS over a period of three years. These delays in lodging required taxation information are not minor and cannot be regarded as mere oversights on his part. The Applicant's failure to pay his employee's superannuation for six quarters demonstrates a disregard of the superannuation system. In failing to pay the superannuation guarantee charge during this period, the Applicant retained employee entitlements and used these funds for other purposes. The Applicant has accrued a significant tax debt of $366,533.37 which is currently the subject of a payment arrangement with the ATO, however he has defaulted in making payments under an earlier arrangement.
2. The Tribunal has consistently recognised that compliance by tax agents with their own tax obligations is necessary to 'uphold the confidence and trust that the public are entitled to expect in the services offered by a registered tax agent': Cleary and Tax Practitioners Board [2014] AATA 260 at [19]. See also G J Brown & Co Pty Ltd and Tax Practitioners Board [2016] AATA 740 at [71]; Proh and Tax Agents' Board of Victoria [2010] AATA 149; (2010) 78 ATR 663 ('Proh') at [15]. In Proh, Deputy President McDonald at [15] observed:

It is generally accepted, and the Tribunal accepts, that a failure of an agent to attend to his/her own taxation affairs demonstrates a lack of suitability, rendering the agent unfit to handle the affairs of those who may seek to utilise his/her services.

1. In Su, Davies J found that a failure by an agent to comply with their taxation obligations may render them not a fit and proper person to be a registered tax agent because of the impact such conduct would have on the person's relationship with the ATO, which may in turn reflect on their handling of their client's taxation affairs:

... A tax agent who allows his own tax affairs to get into a state of disorder, who has constant problems himself with the Taxation Department, may not be a proper person to handle clients' affairs for there may come a time when dissatisfaction which officers of the Department may have with the tax agent personally may be reflected in their handling of his clients' affairs ... Undoubtedly, even minor offences, if sufficient in number, can so interfere with a tax agent's standing that he is rendered not a fit and proper person to be registered as a tax agent.

1. Davies J referred to Re Charles Stuckey (District Court of Queensland, 20 July 1959), where Judge Taylor said:

In principle, I consider that a sufficiently bad personal record in tax matters by a tax agent, even if no question of fraud or dishonesty arises, could constitute misconduct, accepting misconduct to be a course of conduct which would be reasonably regarded as disgraceful or dishonourable by his professional brethren of good repute and competency. I also consider that a sufficiently bad personal record in tax matters by a tax agent, even if no question of fraud or dishonesty arises, could render that person not a fit and proper person to remain registered as a tax agent.

(emphasis added)

1. In Su, Davies J found that the failure of Mr Su to lodge his personal income tax returns and the failure to pay group tax instalments on time indicated incompetence.
2. In Toohey and Tax Agents' Board of Victoria [2009] AATA 603 ('Toohey') the Tribunal noted at [36]:

As a tax agent, the applicant should hold himself up to a higher standard than the general public. He has an intricate knowledge of tax laws and it is reasonable to assume that he knows the importance of lodging tax returns on time. His clients, as well the general public, should be able to entrust their taxation affairs to him and have confidence that he is able to lead by example and file his tax returns on time as required by the law.

1. In Shmuel and Tax Practitioners Board [2019] AATA 2168 the Tribunal found that an agent's conduct in failing to comply with their own tax obligations reflects adversely on their good fame and character and is inconsistent with the 'fit and proper person' requirement.[62] Senior Member Groom stated at [23]:

There is clear authority that a failure by a tax agent to comply with taxation obligations is sufficiently serious of itself to justify a finding that a person fails to meet the fit and proper person requirement. Complying with taxation obligations is a fundamental duty of a tax agent and goes to the heart of an agent's capacity and willingness to perform their function. A failure to comply with taxation obligations must raise serious doubt about the capacity and commitment of an agent to competently handle other people's taxation affairs. As described by Deputy President Handley and Senior Member Professor Creyke, in the case of a tax agent, compliance with taxation obligations is a matter that goes to the agent's competence and ability and that "a tax agent's demonstrated conduct should be above reproach, being central to the service provided to his clients".[9] In addition, a failure to comply with taxation laws in the conduct of your personal affairs is a breach of the Code, which itself provides basis for termination of a tax agent's registration under section 30-30 of the Act.

1. In G J Brown & Co Ltd v Tax Practitioners Board [2016] AATA 740 the Tribunal found that, not only was a failure to comply with tax obligations a breach of the taxation law, it is conduct which undermines clients' confidence.[63]
2. Specifically, in relation to the non-payment of tax liabilities, Senior Member Fice in Delis and Tax Practitioners Board [2015] AATA 820 ('Delis') stated:

every taxpayer is required to pay in full his, her or its taxation liability as and when it falls due. Making some payments towards those liabilities over many years in small amounts, often well in arrears of those liabilities arising, and often under the threat of legal action for recovery, is hardly something which should attract an expression of satisfaction. To the contrary, given that in this case that position appears to have been the norm for Mr Delis and Delis Enterprises since around 2000, it deserves condemnation.

1. Senior Member Fice considered that, notwithstanding that Mr Delis demonstrated that his tax compliance was up to date, absent significant pressure from the ATO and the Tax Practitioners Board, there was no evidence that Mr Delis would have complied with his tax or superannuation guarantee obligations and "[i]n fact more significantly, it also strongly suggests that without serious threats being made against his ability to earn an income as he has done in the past, he is unlikely to comply with taxation laws in the future".[64]
2. These remarks by Senior Member Fice have relevance to the Applicant's circumstances. The evidence demonstrates that the Applicant took steps to rectify his non-compliance with his taxation obligations only once significant pressure was brought to bear on him, particularly the prospect of loss of his registration as a tax agent. In light of the evidence that the Applicant only complied with his tax obligations under threat of de-registration or after a payment plan for repayment of debts owed had been agreed with the ATO, the Tribunal cannot be satisfied, following the principles outlined in the authorities cited above, that the Applicant is a fit and proper person to be registered as a tax agent.
3. The evidence before the Tribunal is that the Applicant made a false declaration in relation to his outstanding tax obligations in his application for renewal of registration dated 1 August 2019. It has been recognised in the authorities that the making of false declarations to the Tax Practitioners Board goes directly to a tax agent's integrity and character and can warrant termination of registration. In respect of false answers to questions in annual declarations, in Su Davies J stated at 10:

The annual notice which a tax agent is required to lodge with the Tax Agents' Board is a clear and simple notice but nevertheless an important one. Mr. Su's failure to correctly complete the last three annual notices which he has lodged with the Tax Agents' Board of South Australia is, in my view, of itself, probably sufficient to warrant his removal from the register. A person who does not complete such a form accurately is not a person of sufficient competence and integrity to hold the privilege of acting for clients in the preparation and lodgement of their income tax returns.

(emphasis added)

1. In Ridden, Deputy President McCabe at [29] emphasised the importance to the integrity of regulatory regime of tax agents being scrupulous in their communications with the Tax Practitioners' Board:

... The Board will be compromised in the performance of its function if it cannot rely on applicants for registration being scrupulous in their communications with the Board. The declarations made in connection with registration must be seen to have teeth. Misrepresentations to the Board - even when inadvertent - have the potential to undermine confidence in the registration process, which undermines the self-assessment system operated by the Commissioner.

1. The evidence before the Tribunal is that the Applicant overlooked the indebtedness of the Trust when he completed the declaration in his application for renewal of registration. Even if the Tribunal accepts that this was an inadvertent oversight on the Applicant's part, it nevertheless amounted to a misrepresentation by him to the Taxation Practitioners' Board which is inconsistent with him meeting the standards of fitness and propriety required of tax agents.
2. The Applicant's explanations for his breaches of the Code do not support a positive finding in relation to his fitness and propriety to be registered as an agent. The Applicant's stated reason for his late lodgement of BAS was due to him looking after clients and trying to 'tidy up the practice' following Rod Chippindale's retirement. The Applicant's explanation does not indicate why he could not manage to juggle the responsibilities associated with running a tax practice and meeting his own taxation obligations.
3. In respect of his failure to pay the superannuation guarantee payments and overdue taxation debt, the Applicant states that this was due to financial distress experienced as a consequence of his commercial dealings with a third party. The Tribunal finds that the Applicant's decision to divert funds, which should have been remitted to the ATO, to projects and investments which proved unprofitable, was a choice he made without regard to his outstanding tax obligations and the entitlements of his employees, and does not mitigate or excuse his multiple failures to make payments as required under taxation law.
4. Similar justifications for tax agents' failure to meet their tax obligations have not been accepted by the Tribunal in previous cases. In Phillip Same Accountants Pty Ltd and Tax Practitioners Board [2010] AATA 439, Deputy President McDonald stated:

In this case the failures are extensive and Mr Same has had the use of money which ought to have been paid to the ATO. The public can expect those such as Mr Same, who as the result of registration as tax agents, to lead by example by meeting their obligations to file required returns and to pay tax owing on time. It is clearly a breach of trust for money, which should be set aside for the ATO, to be diverted for other purposes. That breach of trust occurs in circumstances when the clients are unaware that money, they have paid for remission to the ATO as GST, has been diverted for use by Mr Same until such time as he chooses to pay it or indeed, as in the case of JMN, if it is ever paid.

1. In Delis, the Tribunal approved the following passage by a Senior ATO Case Manager:

The trustee is a tax agent by trade and therefore is aware of his obligations to meet his taxation liabilities and lodgment requirements. The money which has been outstanding to the ATO are "trust" monies, that is the taxpayer holds the money in trust until such time as they are required to remit the funds to the ATO. The money represents amounts that are withheld from employees' wages (therefore the employee's money) or collected on behalf of the Government. If your client fails to pay these funds by the due date, then they are making use of monies which they are not entitled to be holding. This then gives them an advantage over other taxpayers in the same industry who fulfil their obligations. Such behaviour is not acceptable.

1. In relation to the Applicant's stated personal reasons for his lodgement delays and defaults in his debt repayment, the Tribunal finds that these do not justify his breaches of the Code. In Adamec and Tax Agents' Board of Victoria [2005] AATA 913 the Tribunal stated at [70]:

Family sickness, bereavement, domestic responsibilities, personality clashes in the workplace, fluctuating work loads and failed business ventures are not uncommon... No doubt, some people are better equipped, psychologically, than others to cope with these vicissitudes, but this cannot alter the characterisation of the events themselves. In making an allowance for "special circumstances", the authorities provide that something more than misfortune is required. The existence of professional standards would become impossibly compromised if they were to be subject, as a matter of course, to the prevailing domestic harmony, physical wellbeing and general equanimity of the individual professional.

1. Having regard to the evidence before it and the relevant authorities cited above, the Tribunal finds that the Applicant's conduct in breach of the Code indicates a deficiency in his integrity and character such that it cannot be satisfied he is a 'fit and proper person' as required for registration as a tax agent. The Applicant's conduct falls short of the high standards expected of a tax agent by the TASA and the general public. As Deputy President McDonald observed in Toohey at [36] cited in paragraph 58 above, a tax agent's clients and the public should be able to have confidence that the agent is able to 'lead by example' and meet his or her tax obligations on time as required by law. The Applicant's non-compliance with his personal taxation obligations and those of the Trust and the Super Fund demonstrate that he did not 'hold himself up to a higher standard than the general public' nor did he 'lead by example' by meeting his tax obligations in a timely manner.
2. In making this finding, the Tribunal has also had regard to the evidence before it that the Applicant breached the two conditions of the stay order made by the Tribunal on 13 March 2020. In the period between the date of the stay order and the hearing, the Applicant continued to accept new clients, which on his own evidence numbered 71 in total, defaulted on his payment plan with the ATO for his ICA debt, and did not lodge his 2019 ITR on time. The Applicant's evidence is that he did not think this order precluded him from assisting former clients or adding family members and associated entities of existing clients to his client base. The Tribunal finds that the Applicant acted in contravention of the conditions of the stay order by adding new clients, defaulting on his payment plan, and failing to lodge his 2019 ITR by the due date. These contraventions add to the evidence supporting the Tribunal's finding that the Applicant is not a 'fit and proper person' for registration as a tax agent.
3. The Tribunal has considered whether there is evidence of the Applicant's contrition and a genuine insight into his conduct in assessing his fitness and propriety to be registered as a tax agent. In Stasos v Tax Agents' Board of NSW [1990] FCA 379; (1990) 21 ATR 974 Hill J held at 983 that in determining whether a person is fit and proper, it is relevant to consider whether the person understands the impropriety of their previous conduct:

Where the issue is whether a person, who has been guilty of misconduct is at a time somewhat after that misconduct a fit and proper person to exercise a particular occupation carrying with it privileges and responsibilities, it will be relevant whether that person has understood the error of his ways. Failure so to do would, of itself, demonstrate his unfitness: NSW Bar Assoc v Evatt [1968] HCA 20; (1968) 117 CLR 177 at 184.

1. Hill J also referred to a tax agent's dealings with the ATO as another relevant indicator of fitness. His Honour stated at 984:

In addition to the tax agent dealing with his client, he will, almost invariably have dealings with officers of the Australian Taxation Office and perhaps the Boards or Tribunals to which I have already referred. Those dealings must be able to be carried on in an atmosphere of mutual trust. The Commissioner and his officers must be able to accept that, to the best of the ability of the tax agent, returns have been prepared which are true and accurate.

...a person who has been shown to be other than a fit and proper person to be registered must satisfy the Tribunal considering his re-registration or cancellation of his registration as the case may be, that he appreciates the significance of his wrongdoing, that he regrets it... and that it is truly unlikely that there will be any lapse in the future of the standards which are required of him.

(emphasis added)

1. The Applicant exhibited some degree of contrition in his Statement of Facts, Issues and Contentions and in his oral evidence at the hearing. He stated that he is now 'fully aware' of what he must do to do the right thing by himself and the registration he holds, and has 'a much clearer perspective' of what he is doing.[65] Whereas the Tribunal accepts the Applicant's stated contrition is genuine, the evidence indicates that he does not fully appreciate the seriousness of his conduct. As noted above, the Applicant only took steps to improve his compliance in the face of the intervention by the ATO and the Tax Practitioners' Board and the prospect of him losing his registration as a tax agent. Furthermore, despite being granted the benefit of a stay on the implementation of the Reviewable Decisions, the Applicant added 71 new clients in breach of the conditions of the stay.
2. On the evidence before it and for the reasons stated above, the Tribunal finds that the Applicant does not meet the tax practitioner registration requirement of being a 'fit and proper person'.

3) Is the termination of the Applicant's registration as a tax agent pursuant to paragraph 40-5(1)(b) of the TASA appropriate?

1. Having found that the Applicant does not meet the tax practitioner registration requirement of being a 'fit and proper person'', the Tribunal is satisfied that the termination of the Applicant's registration as a tax agent under paragraph 40-5(1)(b) is appropriate.

4) Is the determination pursuant to sub-section 40-25(1) of the TASA that the Applicant may not apply for registration for a period of 18 months appropriate?

1. The Respondent contends that the termination of the Applicant's tax agent registration and the imposition of an 18 month period during which he may not re-apply for registration is appropriate given:

(a) the Applicant has committed a significant breach of the Code, demonstrating that he is not of sufficient competence and integrity to hold the privilege of acting for clients and providing tax agent services;

(b) based on the Applicant's tax compliance history, the Respondent has no confidence that the Applicant will address the current overdue tax debts, notwithstanding the existence of the payment arrangements with the Commissioner;

(c) the Applicant's conduct undermines the integrity of the tax practitioner profession as well as the Respondent's statutory duty to ensure that tax practitioners uphold appropriate standards of professional and ethical conduct; and

(d) the Applicant's ongoing failure to recognise and appreciate his obligations as a registered tax practitioner, including complying with the Code.[66]

1. In Yvonne Anderson and Associates Pty Ltd and Tax Practitioners Board (Taxation) [2020] AATA 1881 at [79] the Tribunal observed:

... Deregistration of tax agents is a step taken by the TPB to protect the public; it is not a punishment. The TPB's focus is on ensuring that taxpayers can have confidence that they are obtaining competent services.

1. Deregistration also acts as a deterrence to the agent under investigation and to other agents. In Kishore and Tax Practitioners Board [2017] AATA 271, Deputy President Frost provided the following general principles in determining the appropriate sanction at [18]:

The imposition of a sanction is not for the purpose of punishing the individual, but for the protection of the public and the maintenance of proper standards within the regulated industry. A sanction may also serve the purpose of personal deterrence (to encourage the individual to comply with standards in the future) or general deterrence (to encourage others to comply).

1. Deputy President Frost identified the following non-exhaustive list of factors relevant to deciding the appropriate sanction at [19]:

(a) the seriousness of the conduct warranting the sanction;

(b) the likelihood that the conduct will be repeated and the potential harm to the public if it is;

(c) the impact of a particular sanction on the individual (and especially where the sanction may inhibit or prevent the individual's capacity to earn a living);

(d) the interest of the public in seeing appropriate sanctions applied;

(e) the extent to which the individual has acknowledged the breaches and the seriousness of them; and

(f) the extent to which the individual has demonstrated genuine contrition or remorse.

1. In relation to the seriousness of the conduct warranting the sanction, the Applicant's conduct involves multiple failures by him to lodge BAS for himself and for the Trust of which he is trustee, multiple failures to lodge income tax returns and superannuation statements, multiple failures to pay superannuation indebtedness, BAS indebtedness, and income tax indebtedness, failures to pay the indebtedness of the Trust of which he was trustee, failing to meet obligations on numerous occasions under payment arrangements, making a false representation in his application for renewal of his registration, and adding 71 new clients contrary to the conditions of the stay ordered by the Tribunal. This conduct is serious, not only because of the number of contraventions, but also the lengthy period of years over which they occurred. Many of the delays in lodgements involved delays of hundreds of days. Whereas individually each contravention may be considered relatively minor, cumulatively they amount to serious breaches of the Applicant's tax obligations.
2. In relation to the likelihood that the Applicant's conduct will be repeated, the length of the history of his non-compliance, the number of defaults in making required payments and lodging required statements, and his apparent disregard of the conditions of the stay order, provide objective evidence that points to a significant likelihood that the contravening conduct will be repeated. In terms of the potential harm to the public, it is essential that tax agents meet their tax obligations, if the integrity of the regulatory regime is to be maintained and the public interest protected.
3. As regards the impact on the Applicant of the termination of his registration, the extent to which it may inhibit or prevent his capacity to earn a living is an important consideration. A period of non-application will have an adverse effect on the Applicant however the actual financial impact and impact on his livelihood has not been articulated by him in any detail. While a non-application period will preclude the Applicant from earning income as a tax agent, his evidence is that he is also a registered mortgage broker. His evidence is that he can continue to work in this capacity and therefore loss of his registration 'wouldn't impact on [him] directly [as he has] got... some options'.[67] The Tribunal has noted the Applicant's evidence that his staff will be indirectly impacted if he does not continue to be registered as a tax agent, however this factor is not relevant to the determination of the appropriate period of non-application for the Applicant.
4. The extent to which the Applicant has acknowledged the breaches and the seriousness of them and the demonstration by him of genuine contrition or remorse has been considered above in the context of his fitness and propriety to be registered. The evidence is that the Applicant only took steps to rectify his non-compliance following significant scrutiny from the Tax Practitioners Board and the ATO and the prospect of sanctions, including the loss of his registration. The unsuccessful financial ventures in which he was embroiled and his putting the concerns of others ahead of his own do not excuse or justify the Applicant's various failures to lodge required documents, failure to pay employee's superannuation guarantee and the accrual of a significant amount of tax debt. The mitigating circumstances raised by the Applicant do not assist the Applicant in demonstrating that he should not be precluded from application for registration for a period of time.
5. The public has a strong interest in seeing appropriate sanctions applied to tax agents who neglect or disregard their obligations under taxation law. In the Applicant's circumstances, the public interest is advanced by the Applicant being precluded for a reasonable period of time from registration as a tax agent.
6. For the reasons detailed above, the Tribunal finds that Applicant's conduct falls short of the standard of conduct expected by the Code and the TASA and undermines the regulatory scheme. Specific deterrence is also a relevant factor in determining the appropriate sanction to ensure that the Applicant learns from his conduct, and general deterrence is important to discourage other tax agents from engaging in the conduct engaged in by the Applicant.
7. In assessing the non-application period appropriate in the Applicant's circumstances, the Tribunal has considered two recent decisions involving similar facts relied on by the Respondent in its submissions.[68] In Hill and Tax Practitioners Board [2020] AATA 678 the Applicant had made false declarations about his tax obligations to the Board on six occasions, and had not complied with various tax lodgement and debt obligations. His conduct involved breaches of the same provisions of the Code (sub-sections 30-10(1) and 30-10(2) as the Applicant in this matter. The Tribunal was satisfied that the Applicant was not a fit and proper person and determined that a two-year non-registration period was appropriate.
8. In Madz and Tax Practitioners Board [2019] AATA 4773, the Applicant had failed to lodge his income tax returns and BAS over a period of approximately two years and failed to comply with an order issued by the Board. The relevant lodgements remained outstanding at the date of the hearing. Deputy President Pascoe stated at [27] that he was satisfied:

... that the failure of the Applicant to lodge his income tax returns and business activity statements over such a long period of time justified the decision of the Respondent to terminate his tax agent registration. The Applicant was clearly well aware of the need for all taxpayers to comply with the law and in particular for those who hold a position of trust as a tax agent to conduct their affairs in a way which maintains public confidence.

1. The Tribunal determined that a 12-month non-application period was appropriate in the applicant's circumstances.
2. The extent of the applicant's non-compliant conduct was greater in Hill than in the Applicant's circumstances however, at a general level, the breaches of the Code in both cases are comparable. In Madz, there were no false declarations made to the Board by the Applicant nor failures to pay overdue tax debt. The Respondent submits that the Applicant's case sits between Hill and Madz, and therefore an 18-month period of non-registration is appropriate in all of the circumstances.[69]
3. As Deputy President McCabe cautioned in Ridden at [40], '[t]here is some danger in rifling through reported cases in search of comparisons'. The Tribunal respectfully agrees that each individual matter must be assessed objectively based on its own particular facts. However, it is also important that where possible there be consistency in the decisions of Tribunal which involve similar facts. Whereas the Tribunal is not bound by other Tribunal decisions, it is desirable for it to be guided by them where appropriate in order to promote consistent decision-making and to provide guidance to applicants and decision-makers in subsequent cases. In Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 ('Drake (No 2)') at 643, Brennan J (then President of the AAT) noted that consistency of comparable decisions is '[o]ne of the factors to be considered in arriving at the preferable decision.'
4. Having regard to the Applicant's particular circumstances and similar Tribunal decisions, and respectfully following Justice Brennan's instruction in Drake (No 2), the Tribunal agrees with the Respondent that a non-application period of 18 months is appropriate.

1. The Tribunal affirms the Reviewable Decisions dated 30 January 2020.

I certify that the preceding 96 (ninety-six) paragraphs are a true copy of the reasons for the decision herein of Senior Member Linda Kirk

...............................[sgd].........................................

[5] TPB Information Sheet 34-2018 at [7].

[19] Transcript 5 March 2021, 8, 10; Applicant's Statement of Facts, Issues and Contentions,

[23] Transcript 5 March 2021, 16-17, 18.

[24] Transcript 5 March 2021, 17-18, 20.

[31] Applicant's Statement of Facts, Issues and Contentions, 2.

[37] Transcript 5 March 2021, 61; Applicant's Statement of Facts, Issues and Contentions, 3.

[46] Respondent's Amended Statement of Issues, Facts, and Contentions, 28.

[61] Respondent's Amended Statement of Issues, Facts, and Contentions, 8.

[62] [2019] AATA 2168, at [24].

[63] [2016] AATA 740, at [71].

[64] [2015] AATA 820, at [98].

[66] Respondent's Amended Statement of Issues, Facts, and Contentions, 8-9.

[68] Respondent's Amended Statement of Issues, Facts, and Contentions, 48-50.

[69] Respondent's Amended Statement of Issues, Facts, and Contentions, 50.