Documentation, Tax

Tax agent banned over false audit declarations

tax agent false declarations

The registration of a tax agent has been terminated after he was found to have made more than 100 false declarations regarding SMSF audits.

The registration of a West Australian tax agent who lodged SMSF annual returns and false declarations they had been audited has been terminated by the Tax Practitioners Board (TPB) following a decision by the Administrative Appeals Tribunal (AAT).

The TPB said its initial decision to terminate the registration of Ashley Cross of West Perth on the grounds of misconduct and to also impose a two-year non-application period had been affirmed by the AAT in a hearing on the 9 March. The registration of Cross’s partnership, trading as M Adamson and A Cross (Adamson and Cross) was also terminated.

The board stated it took action against Cross following a referral from the ATO about SMSF auditor number (SAN) misuse and found he and his partnership “had failed to act honestly and with integrity and additionally failed to provide competent tax agent services”.

“Over a period of nine years, Adamson and Cross lodged 125 SMSF annual returns (SAR) falsely declaring that the SMSFs had been audited when in fact they hadn’t been.”

According to the AAT decision, on 2 April 2020 the TPB made its initial decision to terminate the registration of Cross – which would commence from 19 May 2020 – and an appeal was made to the AAT on 14 May 2020, heard on 26 October 2020 and a decision made earlier this week.

During the AAT proceedings, the TPB stated Cross argued “that the degree of dishonesty involved was lessened by the fact that ultimately, when audited, the SMSFs were all found to be compliant and that he did not derive any financial benefit”.

“The tribunal did not accept these contentions,” it added.

“The tribunal found that regardless of his motivation, Cross had repeatedly and deliberately chosen to put what he perceived to be the interests of his clients above his fundamental professional duty to act honestly. He repeatedly, deliberately chose to mislead the ATO.”

TPB chair Ian Klug said: “The terminations imposed reflect the gravity of Mr Cross’s and the partnership’s dishonest conduct in lodging SMSF annual returns with false declarations over such a prolonged period.”

The TPB noted 10 tax practitioners have been terminated as a result of false declarations in SARs and four other practitioners have had their registration suspended, and following ATO referrals more than 60 practitioners were subject to TPB inquiries regarding SAN misuse.

The board said its ongoing compliance action was connected to an ATO SMSF lodgement campaign focused on disengaged SMSF trustees – of which 1100 are estimated to be tax practitioners – and the two bodies would collaborate to address the risks in respect to the tax practitioners in this group.

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