The TPB also imposed a two-year ban on re-applying for registration, which was later varied by the AAT to 18 months. This variation was to account for the time that Clifford had already been deregistered.

The investigation by the TPB revealed Clifford had breached four items of the Code of Professional Conduct and ceased to be a fit and proper person. She made false and misleading statements and had significant outstanding tax debts of over $145,000 with no payment plan.

Additionally, she incorrectly lodged multiple SMSF annual returns without obtaining the required audits. She informed the TPB she knew there were no auditor’s reports when she lodged the returns and claimed she only did so to stop the ATO from asking why she had not lodged her clients’ tax returns.

During the AAT hearing, Clifford submitted that her ongoing health issues and personal circumstances were mitigating factors. Although the AAT acknowledged her personal circumstances, it found her conduct was not an isolated lapse of judgement, but a pattern of conduct over significant periods, for which there was no excuse.

Clifford went on to appeal the AAT’s decision to the Federal Court on the basis that the AAT failed to consider:

• Alternative sanctions available under the Tax Agent Services Act 2009 (TASA).
• Setting aside the TPB termination decision and substituting it with a lesser sanction, or no sanction at all.
• She was winding down her practice and not accepting new clients.
• She was a sole tax practitioner and termination of her registration would cause prejudice to her clients.

In dismissing the appeal, Justice Christopher James Horan did not accept that the AAT was required to consider the availability of lesser alternative sanctions. Having found Clifford was not a fit and proper person to be registered, he ruled the TPB was entitled to terminate her registration under the TASA.

Justice Horan also found it was clear that termination was not treated as an automatic consequence and there was no failure to appreciate the range of sanctions available in respect to breaches of the code.