BAS agent fined $40,000 for lodging tax returns without a licence, as confusion over registration laws continues

The Tax Practitioners Board has fined a BAS agent $40,000 after she received fees and lodged tax returns for individuals even though she wasn’t registered as a tax agent.

The case is an unusual flip on the latest stories involving unregistered agents, as most recent incidents have involved agents neglecting to be registered for lodging Business Activity Statements.

But CPA Australia head of policy Paul Drum told SmartCompany this morning the case suggests there is still confusion about who should be registered, and for what.

“Agents really need to understand what their registration enables them to do, and obviously this case points out that a BAS agent simply can’t charge a fee for lodging income tax returns.”

The Federal Court has ordered Isabella Munro, a BAS agent from Queensland, to pay $40,000 after she lodged individual tax returns between July 2010 and August 2011. She also lodged claims for deductions without taxpayers’ consent.

Tax Practitioners Board chair Dale Boucher said in a statement the penalty would send a “strong message” to the tax community.

“This case shows that even though you may be a registered BAS agent, you should not be providing tax agent services, like preparing tax returns, for a fee. Those who provide tax agent services for a fee while not registered, will be caught and have to pay for their actions,” Boucher said.

“The TPB is focused on protecting the taxpayer community. When we identify a serious breach of the law, it is our duty to do everything in our power to ensure it stops.”

Tax agents have always had to register, but more recent rules involving registration for BAS agents have been controversial.

As of 2011, the TPB has required agents register for a separate licence if they want to lodge Business Activity Statements. The TPB issued a warning last month about the requirements, reminding agents the transitional period for registering will end on February 28, 2013.

Paul Drum says this case involving a BAS agent thinking she could lodge tax returns without a licence is a reminder there is still confusion among agents about what they can or cannot do.

“They’re on the right path, but our concern is primarily about unregistered BAS agents, not necessarily tax agents.”

“However, this case certainly raises the issue that there is a clear delineation between what a tax agent can do and what a BAS agent can do.”

Drum is also critical of the lack of information about the requirements, saying “it’s incumbent on the Tax Practitioners Board” to provide more information.

“This has quietly slipped in, in many ways. There has been no campaign of a large scale that is encouraging people to know about or understand it”.

“Agents need to understand what their registration enables them to do.”

 

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