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R&D Advisor Terminated by TPB for Making False Statements

The AFR and Tax Practitioners Board (TPB) has reported this week on the termination of tax agent registration of an advisor who formerly worked at a large firm.

The advisor was found by the TPB to have breached multiple obligations under the Tax Agent Services Act 2009 and the Code of Professional Conduct.

The TPB imposed a 4-year ban prohibiting re-applying for the terminated registration.

The TPB media release notes:

• The terminated advisor made false or misleading statements in applications for the Research & Development Tax Incentive (RDTI) lodged on behalf of clients. These applications did not meet the eligibility requirements for the RDTI and could not be substantiated.
• The terminated advisor’s failure to scrutinise clients’ RDTI claims resulted in significant tax shortfalls and penalties imposed on the clients.
• The terminated advisor’s behaviour also resulted in significant time and resources being expended by the Australian Taxation Office (ATO) and Industry Innovation and Science Australia, both of which are responsible for fairly assessing RDTI applications.

Swanson Reed has no knowledge of the particulars of this case (aside from what has been published in the media).

The termination should be deterrence to advisors seeking to misuse the benefits available under the R&D Tax Incentive. The case also serves as a reminder for companies and their tax agents to:

• Procure R&D Tax Advisory services from a reputable advisor;
• Ensure the advisor is fully transparent in respect of:
  • The basis for R&D expenditure calculations;
  • Working papers and details of key positions, such as any apportionment methods where relevant;
  • The relevant guidance published by AusIndustry and ATO and the documentary requirements for companies claiming the R&D Tax Incentive.

Swanson Reed supports measures that seek to maintain the integrity of the R&D Tax Incentive and the tax profession.

Please get in touch with our office if you require assistance, would like to speak to someone about a potential claim, or check out our website for more information.