[Home] [Databases] [WorldLII] [Search] [Feedback] Administrative Appeals Tribunal of Australia

You are here: 

Cartelli and Tax Agents' Board of Victoria [2008] AATA 135 (21 February 2008)

Last Updated: 21 February 2008

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 135

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2007/3738

Applicant

Respondent

DECISION

Date 21 February 2008

Place Melbourne

(sgd) Mr B. H. Pascoe
Senior Member

TAX AGENTS – refusal of application for registration – applicant employed by own company – worked part time for tax agent – application refused on grounds of not being employee of tax agent – no requirement to be employee of tax agent – remitted to respondent for reconsideration

Income Tax Assessment Act 1936 s 251JA

Income Tax Regulation 1936

Tax Agents’ Board of Queensland V Seymour (1990) 21 FCR 357

REASONS FOR DECISION

1. This is an application to review a decision of the respondent Tax Agents’ Board of Victoria (the Board) to decline an application for registration as a tax agent by the applicant, Ms F. Cartelli. The decision not to grant registration was on the grounds that Ms Cartelli had not been engaged in the required relevant employment.
2. At the hearing Ms Cartelli was represented by a friend, Mr P. Meilak. The respondent was represented by Mr S. Linden of the Australian Government Solicitor’s Office. Evidence was given by Mr K. Davis, an accountant and tax agent.
3. Section 251JA of the Income Tax Assessment Act 1936 (the Act) provides that the Board shall register a person if that person is a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters. Section 251BC provides so far as is relevant to this matter, that a person is not a fit and proper person if the person does not hold such qualifications (whether academic, by way of experience or otherwise) as are prescribed. Regulation 156 of the Income Tax Regulation 1936 prescribed the qualifications for the purposes of s 251BC. Insofar as they are relevant to this matter the prescribed qualification include:

REGULATION 156(2) A qualification is that a person:

(a) ...;

(b) ... ;

(c) has:

(i) been engaged in relevant employment on a full-time basis for not less than a total of 12 months in the preceding 5 years; or

(ii) otherwise been engaged in relevant employment to an extent that the Board regards as equivalent to the employment mentioned in subparagraph (i); or

(iii) been engaged in such other employment, and for such time, as the Board regards as equivalent to being engaged in the relevant employment mentioned in subparagraph (i); and

(d) ...;

REGULATION 156(6): In this regulation:

relevant employment means employment by a person or a partnership, or as a member of a partnership, in the course of which there has been substantial involvement in income tax matters including.

(a) the preparation or examination of a broad range of income tax returns; and

(b) the preparation of examination of objections to assessments issued in respect of such returns; and

(c) the provision of advice in relation to income tax returns, assessments or objections.

4. Ms Cartelli has worked in the office of Ken E. Davis and Associates, Consulting Accountants, for two to three days per week since April 2002. Mr Davis estimated that she had worked an average of 1020 hours each year totalling 5100 hours for the five years to April 2007. Until April 2007 she was employed by her own company Wasada Nominees Pty Ltd trading under the registered business name of Wasade Corporate Services. This entity invoiced Ken E. Davis and Associates for her time working in that practice. From April 2007 she has been employed directly by Ken E. Davis and Associates.
5. The application for registration was declined by the Board on the grounds that Ms Cartelli had not been engaged in relevant employment as prescribed in Regulation 156. It was said that, as an employee of Wasada Nominees Pty Ltd, she was not employed by a registered tax agent.
6. In Tax Agents’ Board of Queensland v Seymour (1990) 21 FCR 357 Pincus J held that employment means employment as an employee in the ordinary sense. This interpretation is reinforced by the definition in Regulation 156(6) requiring employment by a person or a partnership. However, neither Regulation 156(2)(c) nor 156(6) requires that employer to be a registered tax agent. In this case, until April 2007, Ms Cartelli was a full time employee of Wasada Nominees Pty Ltd. Within that employment she was engaged two to three days a week involved in income tax matters within the office of Ken E. Davis and Associates. Even if the Regulation required employment by Mr Davis as a tax agent, which I am unable to accept, it could be argued that the evidence of Mr Davis demonstrated that Ms Cartelli was, at all times when at his office under his direction, control and supervision and, therefore, in a master-servant relationship equalling employment by him.
7. It follows from the foregoing that the Board was incorrect in declining the application solely on the grounds that Ms Cartelli was not employed by a registered tax agent. While she was not involved full time in income tax matters, it is clear that the time involved since April 2002 should be accepted as equivalent to full time for not less than twelve months in the five years preceding the date of application.
8. However, the final hurdle to be overcome is whether that involvement in income tax matters satisfies the requirements of Regulation 156(6). It is not clear whether the Board’s consideration went beyond the question of employment. The evidence of Mr Davis indicated a probability that Ms Cartelli may well satisfy the requirements of paragraphs (a) and (c) of Regulation 156(6) but may not satisfy paragraph (b). As the hearing was concentrated on the issue of employment as the reasons for the Board’s decision, it is appropriate to remit the matter to the Board to consider whether Ms Cartelli satisfies the requirements of Regulation 156(6) in the required range of involvement in income tax matters.
9. The decision under review should be set aside and remitted to the respondent for reconsideration in accordance with these reasons for decision.

I certify that the 9 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B.H. Pascoe, Senior Member

Signed: Lauren Spragg

Associate

Date of Hearing 23 January 2008

Date of Decision 21 February 2008

Advocate for the Applicant Peter Meilak

Advocate for the Respondent Stephen Linden