In an earlier proceeding initiated by the Tax Practitioners Board against Mr Hacker, the TPB alleged that Mr Hacker had prepared income tax returns for numerous clients in the 2015/16, 2016/17 and 2017/18 financial years through the businesses One Stop Global Staffing Pty Ltd and Naleview Pty Limited of which he was a director and secretary.

It also alleged that Mr Hacker had provided unregistered BAS services for reward in contravention of s 50–5(2) of the TAS Act.

Mr Hacker contested the allegations on the basis that the TPB had not proved that he charged or received a fee or other reward for providing tax agent services.

The Court dismissed this on the basis that Mr Hacker had been paid wages by Naleview and OSGS, and the giving of such advice and preparation of income tax returns for strangers is an activity that “would not usually be done without the expectation of remuneration or other reward”.

The Court found that OSGS contravened s 50–5(1) of the TAS Act on the five occasions and Naleview contravened s 50–5(1) of the TAS Act on 37 occasions. It also found that Mr Hacker contravened s 50–5(1) of the TAS Act on the 42 occasions when OSGS and Naleview also contravened that provision.

He was also found to have contravened s 50–5(2) of the TAS Act on three occasions.

On 12 February 2019, the TPB sought interlocutory injunctions restraining the respondents from providing tax agent services or BAS services for fee or reward.

The Federal Court dismissed the application on 1 March 2019 on the basis that Mr Hacker agreed to an undertaking restraining him from providing tax agent services within the meaning of s 90–5 of the Tax Agent Services Act 2009 (Cth) or BAS services within the meaning of s 90–10 of the Tax Agent Services Act 2009 (Cth) for fee or reward to any person or entity.

On 17 June 2019, the TPB filed an interlocutory application and statement of charge alleging that Mr Hacker and OSGS had breached the undertaking, and sought the imposition of penalties upon them for contempt of court.

An amended statement of charge filed on 27 September 2019 alleged that Mr Hacker and OSGS committed contempts of court on three occasions by breaching the undertaking of 1 March 2019 by preparing three income tax returns.

By a further interlocutory application and statement of charge filed on 13 November 2019, the TPB alleged that Mr Hacker and OSGS committed contempts of court on five occasions by preparing a further five income tax returns.

On 23 March 2020, the TPB filed another interlocutory application and statement of charge alleging that Mr Hacker and OSGS committed contempts of court on eight occasions by breaching the undertaking of 1 March 2019 by preparing eight income tax returns between 3 September 2019 and 26 February 2020.

On 30 June 2020, the applicant filed a further interlocutory application and statement of charge alleging that Mr Hacker and OSGS committed further contempts of court on three occasions by breaching the undertaking of 1 March 2019 by filing income tax returns between 8 April 2020 and 22 April 2020.

The applications were accompanied by affidavits of the taxpayers involved.

On 10 July 2020, Mr Hacker and OSGS admitted the contempts. The Court ordered that Mr Hacker publish the terms of the order in a prominent place on the front door of the two businesses.

On 19 August 2020, the TPB filed yet another interlocutory application and statement of charge. It was alleged that Mr Hacker failed to comply with the order made on 10 July 2020. It was also alleged that Mr Hacker and OSGS committed contempts of court on nine occasions by breaching the undertaking of 1 March 2019. On 1 September 2020, Mr Hacker and OSGS admitted the contempts.

Justice Darryl Rangiah stated that the conduct of Mr Hacker and OSGS demonstrated “blatant indifference to the undertakings they offered to, and which were accepted by, the Court”.

“Each contempt was committed in wilful and flagrant disregard of their undertaking. The breaches were contumacious, and are criminal contempts,” stated Justice Raingiah.

“The contempts generally followed a pattern. Mr Hacker and OSGS would be caught out by the [TPB] providing unregistered tax agent services for fee or reward in contravention of the undertaking; the applicant would commence proceedings for contempt; Mr Hacker or OSGS would admit the contempts; then they would promptly commit further breaches of the undertaking.

“The admissions acknowledged the contempts, but the contempts continued. In view of this pattern of conduct, I regard each contempt as progressively more serious.”

Justice Rangiah said substantial weight should be given to the objects of general and specific deterrence.

“Those who provide undertakings to the Court should be left in no doubt that non-compliance will have appropriate consequences. In this case, specific deterrence is particularly important given the number and pattern of contempts committed by Mr Hacker and OSGS,” he stated.

Justice Rangiah also noted that Mr Hacker had made a statement in his affidavit that he had never previously been the subject of any professional disciplinary proceedings in respect of his work as an accountant, despite being disqualified as an SMSF auditor in an order issued by ASIC in March 2020.

Mr Hacker was disqualified from being an approved SMSF auditor on the basis that he had breached independence requirements, had failed to obtain sufficient audit evidence in relation to audits he carried out and that he had failed to comply with an enforceable undertaking he had provided to the ATO in 2011.

ASIC concluded that Mr Hacker was not a fit and proper person to remain an approved SMSF auditor.

“ASIC’s decision record indicates that as a result of a previous audit, Mr Hacker had given an enforceable undertaking to the ATO in 2011, including to use a particular audit tool, to take steps to ensure his independence, to report audit contraventions and to attend certain courses. ASIC found that he had breached a number of aspects of his undertaking,” said Justice Rangiah.

The Court imposed a prison sentence of 14 days for the second lot of contempts, one-month imprisonment for the third contempts, two months for the fourth contempts and four months for the fifth contempts.

“The sentences for the Fifth Contempts will be suspended after Mr Hacker has served one month of the four months’ imprisonment, but the remainder of the sentence will be served in the event that he breaches the injunction which I have indicated I will grant within a period of three years from his release from prison,” stated Justice Rangiah in his sentencing of Mr Hacker.