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False cash flow boost claim puts tax agent in hot water

Adrian Flores
Adrian Flores
09 October 2020 1 minute readShare
False cash flow boost claim puts tax agent in hot water

A tax agency has been banned by the Tax Practitioners Board from providing services for two years after attempting to rort the COVID-19 cash flow boost.

The TPB terminated the company registration of Sydney-based agent TLL Tax Pty Ltd (TLL) after breaching the Code of Professional Conduct in the Tax Agent Services Act 2009 relating to competency, honesty and integrity by rorting the COVID-19 stimulus cash flow boost for over $20,000.

The investigation into the case focused on two clients, where the TPB found that TLL had breached the TPB’s Code of Professional Conduct in a range of instances, including:

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  • TLL had changed the bank account details of its clients to those of the agent’s company director, Ms Liying Tong, without authority.
  • Lodged income tax returns and business activity statements on behalf of one client who was no longer trading, without their knowledge or authorisation, which included false amounts.
  • When confronted by the first client, TLL subsequently lodged unauthorised amendments to the client’s tax returns and business activity statements.
  • Lodged a further business activity statement for the second client, reporting an amount that the client was not aware of and which could not be substantiated.

The investigation also found that two days after the falsified refund had been received, Ms Tong had contacted the first client and made an offer to purchase the client’s business, which the client declined.

Ms Tong offered to apply for COVID-19-related stimulus funds in return for a commission, despite knowing that the client was ineligible to receive the stimulus benefits as it had not been trading, the TPB said.

 

With the second client, TLL had reported false turnover amounts, to dishonestly qualify them to receive a cash flow boost payment, which it was not eligible to receive.

Unjustified cash flow boost and GST claims of over $20,000 were subsequently paid into a bank account held by the company’s director, Ms Tong.

This payment was retained by the agent and transferred to another of their accounts and not passed onto the client. 

TPB chair Mr Ian Klug said the misconduct of TLL and Ms Tong was of grave concern to the TPB.

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“To fraudulently claim COVID-19 stimulus payments affects the entire Australian community and takes advantage of the pandemic situation we are all living under,” Mr Klug said.

“Ms Liying Tong was in a position of trust, operating in an uncertain environment, and she abused that trust.”

False cash flow boost claim puts tax agent in hot water
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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