Contraventions of super laws see disqualified tax agent’s registration rejected
A tax agent's appeal against the Tax Practitioners' Board's decision to reject her application for renewal of her registration has been denied by an Administrative Appeals Tribunal (AAT).
The AAT backed the Board's decision on the grounds that Lysa Gylman did not meet the "fit and proper" eligibility requirement of the Tax Agents Services Act 2009.
Gylman was disqualified from being a trustee of a self-managed superannuation fund (SMSF) in October 2012.
In his decision to back the Board's decision, AAT senior member, Peter William Taylor SC, said, "The strong impression I have formed is that Ms Gylman lacks any real understanding of, or at least any real commitment to comply with, the law relating to superannuation and taxation".
"The Board's dissatisfaction about Ms Gylman's fitness derived from prior decisions of the Australian Taxation Office (ATO), and aspects of her conduct on which those decisions were based.
"In October 2012 a delegate of the Commissioner of Taxation determined that Ms Gylman was a disqualified person for the purposes of Part 15 of the Superannuation Industry (Supervision) Act 1993 (the SIS Act).
"The grounds for that disqualification were:
as a trustee of an SMSF, Ms Gilman had contravened relevant provisions of the SIS Act; and
was not a fit and proper person to be a ‘trustee, investment manager or custodian'.
"On 17 May 2013, following an audit of Ms Gylman's tax returns for the 2008 — 2010 financial years, the Commissioner determined that, arising from her conduct as a superannuation trustee, Ms Gylman had a cumulative tax shortfall of $377,814, and imposed penalties, on the basis of intentional disregard of taxation laws. Those penalties totalled $283,361.
"The ATO's October 2012 and May 2013 decisions were, to a substantial extent, based on the same underlying facts concerning a superannuation fund named ‘the Friendly Fund'. Significant facts concerning the Fund (as reported in the ATO audit report of 17 May 2013) included the following propositions:
The Friendly Fund had no reported profit in any tax year from 2003 to 2008;
The Friendly Fund's annual returns for 2008 and 2009 tax years disclosed ‘overseas residential real property' valued at $48,200, no other investment or asset, and did not disclose the year-end balances in the bank accounts Ms Gylman said related to the Fund; and
Between July 2007 and November 2011 the Friendly Fund's bank account disclosed a series of deposits (totalling $1.6 million) and withdrawals (totalling $1.52 million), and related deposits (totalling $996,877) to Ms Gylman's personal account.
"The ATO's position in relation to Ms Gylman's disqualification as a superannuation trustee was that she had operated the Friendly Fund to facilitate the improper early release of superannuation funds and had conducted ‘an artificial scheme … to undermine the legislation'".
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