CA ANZ formally reprimands accountant who took 4 years to file client’s tax return

Last Wednesday (3 December), CA ANZ’s professional conduct committee issued a formal reprimand to a member for failing to lodge a client’s 2019 tax return for over four years.

The CA ANZ member was the director of an accounting firm. The committee found that they failed to complete and lodge their client’s 2019 business tax return for almost five years, despite repeated requests. The return was lodged, eventually, in April 2024.

“The Complainant repeatedly contacted the Member regarding overdue company tax returns, particularly for FY2019,” the committee found.

“Initially, the Member claimed the FY2018 return had been completed and that FY2019 was not overdue. However, over the following 2 years, the Complainant continued to receive notices from the Australian Taxation Office (ATO) indicating that multiple returns remained outstanding.”

“Despite assurances from the Member that the issues would be resolved and that any penalties would be covered by the firm, the Complainant experienced ongoing delays, lack of updates, and repeated apologies without resolution.”

The committee considered that the disciplinary tribunal would have found that the member failed to observe a proper standard of professional care, competence or diligence, failed to reply to professional correspondence expeditiously and failed to comply with the reasonable and lawful direction of CA ANZ.

Instead of a referral to the tribunal, the committee proposed a consent order arrangement with the member, including a censure on the member’s record. It also mandated the member and their firm to submit to a quality review at their cost, with a particular focus on changes made in response to CA ANZ’s review.

The member was also required to pay CA ANZ $696 to cover the costs of investigating and dealing with the complaints.

CA ANZ said that the member’s client expressed frustration over the delay in late 2023, stating that the firm had failed to submit the return despite being paid and repeatedly promising action.

The member conceded that the return had been completed but never sent for a signature, citing a failure in internal processes. They offered to either lodge the return or cover the costs if the client’s new accountants handled it. They also proposed contacting the ATO to seek penalty remissions.

Despite this, the member still failed to resolve the issue. In February 2024, after giving a final notice to the member, the client submitted a formal complaint to CA ANZ. The 2019 tax return was then lodged in April 2024.

The client then continued to follow up with the member regarding “significant interest” that they were now liable to pay the ATO due to the delays in filing their 2019 tax return. They noted they intended to pursue legal action against the member regarding the outstanding debt.

“The Member previously indicated in correspondence that the firm would bear the financial responsibility for any penalties incurred as a result of the delay, but denies that this offer extended to interest payable,” the committee noted.

The member also failed to respond to committee correspondence promptly, which he said was because their emails were marked as promotional material and diverted. However, the committee noted he had responded to earlier emails and was aware of the investigation.

His delayed responses “significantly protracted” the investigation of the complaint, leading them to consider the complaint on four separate occasions. The committee said that the member’s failure to engage with their client, and CA ANZ’s disciplinary process, until recently was “extremely concerning.”

“The initial error which appears to have been an administrative oversight has become much larger and more significant in terms of the impact on the Complainant due to the Member’s failure to engage.”