Federal Court of Australia

Tax Practitioners Board v Hinckfuss (No 3) [2026] FCA 1436

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 50-35 of the Tax Agent Services Act 2009 (Cth) (the Act) the Respondent pay pecuniary penalties to the Commonwealth totalling $132,000.00 for contravening s 50-5(1) of the Act on 11 occasions.

2.    Pursuant to s 50-35 of the Act the Respondent pay pecuniary penalties to the Commonwealth totalling $12,000.00 for contravening s 50-5(2) of the Act on one occasion.

3.    Pursuant to s 50-35 of the Act the Respondent pay pecuniary penalties to the Commonwealth totalling $6,000.00 for contravening s 50-10(1) of the Act on one occasion.

4.    The Respondent pay the Applicant’s costs of the proceeding, to be fixed on a lump sum basis, determined by a Registrar in accordance with GPN-Costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

WHEATLEY J:

Introductory Overview

1    Orders and declarations were made by the Court against Mr Hinckfuss for certain contraventions of the Tax Agent Services Act 2009 (Cth) (TAS Act): Tax Practitioners Board v Hinckfuss (No 2) [2026] FCA 529 (Judgment). The Court declared, (in summary) that Mr Hinckfuss:

(1)    did on 11 separate occasions provide a tax agent service (other than a BAS service) including the preparation and lodgement of income tax returns and amendments to income tax returns for taxpayers, for a fee while not registered to provide those services, in contravention of s 50-5(1) of the TAS Act;

(2)    did on one occasion provide a BAS service including the preparation and lodgement of business activity statements for a taxpayer, for a fee while not registered to provide those services, in contravention of s 50-5(2) of the TAS Act; and

(3)    did on one occasion advertise for the provision of a tax agent service while not registered to provide those services, in contravention of s 50-10(1) of the TAS Act.

2    The Court also made orders permanently restraining Mr Hinckfuss from providing any tax agent service (as defined in s 90-5 of the TAS Act) for a fee or other reward, whilst not a registered tax agent, within the meaning of that term in the TAS Act. Mr Hinckfuss was also permanently restrained from advertising for the provision of a tax agent service (as defined in s 90-5 of the TAS Act) for a fee or other reward, whilst not a registered tax agent.

3    The Tax Practitioners Board now seeks the imposition of civil penalties for those contraventions. These reasons assume a familiarity with the Judgment. However, for a consideration of civil penalties some matters must be reconsidered and restated.

4    Mr Hinckfuss was served with the Judgment on 4 May 2026. Further, on 9 June 2026 Mr Hinckfuss was also served with the Board’s penalty submissions, Authorities Bundle and the affidavits relied on for the penalty hearing. Orders were made on 15 July 2026 listing the matter for the penalties hearing on 9 September 2026.

5    An early issue arose at the penalties hearing as to whether Mr Hinckfuss had been properly served with the Orders of the Court dated 15 July 2026, which listed the hearing for the imposition of penalties.

6    Subject to the following orders, the issue of penalties was heard on 9 September 2026. Orders were made granting Mr Hinckfuss liberty to apply to have the Penalty Hearing (as defined in those Orders) relisted and resumed for further hearing. Those Orders were necessary as it was not clear on the material that Mr Hinckfuss had been properly advised (served) with the Orders listing the Penalty Hearing. The Board, in accordance with those Orders of 9 September 2026 has filed an Affidavit evidencing service on Mr Hinckfuss and that nothing had been received from Mr Hinckfuss seeking to activate the liberty to apply, in relation to the Penalty Hearing.

7    Mr Hinckfuss has not filed any material, made any submissions or sought to activate the liberty to apply which was granted to him on the issue of penalties. This is consistent with the lack of participation with these proceedings, by Mr Hinckfuss.

Relevant principles regarding penalties

8    The object of the TAS Act is to support public trust and confidence that tax agent services are provided to members of the public in accordance with appropriate standards of professional and ethical conduct: s 2-5 of the TAS Act and Tax Practitioners Board v Buckland (Interim Injunction) [2023] FCA 836 at [10] (Hespe J).

9    As explained by Charlesworth J in Tax Practitioners Board v Williams [2023] FCA 63 at [12]:

The importance of s 50-5 hardly needs stating. The prohibition against persons providing tax agent services for fee or reward without being registered as a tax agent is the lynch pin in the regime. It is the requirement to hold a license (in the form of registration) that subjects those who provide taxation services to standards of behaviour contained in the Code and enforceable by the Board. That requirement ensures that defined tax services are only provided by persons who are fit and proper to provide them. The conditions of fitness and propriety require not only that the registrant holds the necessary knowledge and qualifications but also possesses personal characteristics that are not inimical to the statutory purpose. Conduct that contravenes s 50-5(1) is conduct that undermines the efficacy of the whole of the regime.

10    The relevant legislative context was set out and considered in the Judgment at [37]-[46]. It is only necessary to repeat the matters relating to a civil penalty.

11    The Court may order the payment of a pecuniary penalty if the Court is satisfied that the person has contravened a civil penalty provision: s 50-35(2) of the TAS Act. The pecuniary penalty will be for each contravention in an amount that the Court determines is appropriate as the power to impose a penalty is discretionary: Tax Practitioners Board v Van Stroe (No 2) [2023] FCA 1533 at [19] (Banks-Smith J). The purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of that particular legislation by deterring contraventions with that Act: Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450; [2022] HCA 13 at [9] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ). Civil penalty provisions seek to secure compliance with those particular statutory provisions, by deterrence: Pattinson at [14]-[15]. That deterrence is by way of specific deterrence to the contravener and by way of general deterrence to other would-be contraveners: Pattinson at [63]-[64] and Tax Practitioners Board v Van Dyke [2024] FCA 899 at [36] (Abraham J). The “appropriate” penalty is one which strikes a reasonable balance between oppressive severity and the need for deterrence: Pattinson at [46].

12    By application of general deterrence, it is well to recall the observation of the Full Court in Australian Competition and Consumer Commission v High Adventure Pty Limited [2006] ATPR 42-091; [2005] FCAFC 247 at [11] (Heerey, Finkelstein and Allsop JJ) (applied by Logan J in this same statutory framework in Tax Practitioners Board v Ordiales [2022] FCA 1612 at [29] and Van Dyke at [40]):

…Moreover, as deterrence (especially general deterrence) is the primary purpose lying behind the penalty regime, there inevitably will be cases where the penalty that must be imposed will be higher, perhaps even considerably higher, than the penalty that would otherwise be imposed on a particular offender if one were to have regard only to the circumstances of that offender.  In some cases the penalty may be so high that the offender will become insolvent.  That possibility must not prevent the Court from doing its duty for otherwise the important object of general deterrence will be undermined.

13    With reference to this observation, Logan J in Electoral Commissioner of the Australian Electoral Commission v Laming (2024) 304 FCR 561; [2024] FCAFC 109 at [26] (with whom Perry J agreed at [103]) stated:

…The later, emphatic affirmation in Pattinson of the objective of deterrence as the rationale for a civil penalty regime underscores the correctness of this observation. If penalisation at a particular level is necessary to achieve the objective of deterrence in the circumstances of a given case then the fact that the penalty may be ruinous for the respondent individual or corporate respondent concerned is no reason not to fix penalty at that level. A penalty so fixed will not be oppressive. I also agree with the further observations made by Abraham J in Select AFSL concerning the relevance, if any, with respect to the fixing of penalty of a respondent’s subjection to a costs liability.

14    The High Court overturned Laming in Laming v Electoral Commissioner of the Australian Electoral Commission (2025) 99 ALJR 1260; [2025] HCA 31 (HCA Laming). However, the High Court’s decision turned on a narrow issue regarding the statutory construction of s 321D(5) of the Commonwealth Electoral Act 1918 (Cth) and not the objective of deterrence as the rationale for civil penalties: HCA Laming at [1]-[5] (Gageler CJ, Gleeson and Jagot JJ) and [47]-[50] (Gordon J). As such, I regard the observations from Laming applicable.

15    In assessing the appropriate penalty, primarily directed to specific and general deterrence, the following factors would relevantly include (Pattinson at [18]; Australian Securities and Investments Commission v Westpac Banking Corporation (No 3) (2019) 131 ACSR 585; [2018] FCA 1701 at [49] (Beach J)):

(1)    The nature and extent of the contravening conduct and whether it was deliberate or reckless or negligent, careless or inadvertent;

(2)    The amount of the loss or damage caused;

(3)    The circumstances in which the contravening conduct took place, including the length of time and whether the contraventions were isolated or systematic;

(4)    The nature and size of the contravener, including the capacity to pay (so as to act as an effective deterrent);

(5)    The degree, if any, of the contravener’s cooperation with the regulator;

(6)    The extent of any profit or benefit derived from the contravention; and

(7)    The existence of any past history of contravention.

16    The penalty must be fixed as a deterrent and not such as to be regarded as an acceptable cost of doing business: Pattinson at [17]; Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249; [2012] FCAFC 20 at [62] (Keane CJ, Finn and Gilmour JJ).

17    The “course of conduct” or “one transaction” principle requires that consideration should be given to whether the contraventions arise out of the same course of conduct such that a “concurrent” or a single penalty should be applied for the contraventions: Australian Competition and Consumer Commission v Yazaki Corporation (2018) 262 FCR 243; [2018] FCAFC 73 at [234] (Allsop CJ, Middleton and Robertson JJ). This is to ensure that the contravener is not punished twice for what may essentially be the same conduct. This is an analytical tool which can (not must) be used, in any particular case: Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1; [2010] FCAFC 39 at [39]-[42] (Middleton and Gordon JJ, and see Moore J at [2] who agreed as to the principle but differed as to its application); Yazaki at [234]-[235]; Singtel at [53]. This principle does not treat multiple contraventions as just one contravention for the purposes of determining the maximum limit of the appropriate penalty: Yazaki at [229]-[233].

18    Finally, it is necessary to consider the principle of totality as a “final check”. This is to consider the penalties to be imposed on the contravener as a whole: Australian Competition and Consumer Commission v Employsure Pty Ltd (2023) 407 ALR 302; [2023] FCAFC 5 at [52] (Rares, Stewart and Abraham JJ).

The Contraventions of Mr Hinckfuss

19    With those principles in mind, recognising that the appropriate penalty to be imposed is that which secures specific and general deterrence by way of a single, evaluative or instinctive synthesis of all of the relevant matters to the imposition of that penalty: Employsure at [53]; Singtel at [13], it is necessary to consider the particular circumstances of this case.

Nature and Extent of the Contraventions

20    The Board submits that the contraventions by Mr Hinckfuss were deliberate, serious and systematic. I accept that submission. In the Judgment (by way of default judgment) it was accepted that Mr Hinckfuss satisfied the four necessary elements and had provided a tax agent service: Judgment at [52]-[57]. The Board established that Mr Hinckfuss assisted 11 identified clients to prepare and lodge their income tax returns or amended income tax returns, for specific identified income years, which is a tax agent service. It was also established that Mr Hinckfuss knew or ought reasonably to have known that in assisting the clients with the preparation of income tax returns and amended income tax returns, he was providing a tax agent service. Mr Hinckfuss charged those 11 identified clients a fee or received a reward for the provision of each tax agent service and Mr Hinckfuss was not registered in accordance with the TAS Act to provide a tax agent service.

21    In the Judgment it was accepted that Mr Hinckfuss satisfied the four necessary elements and had provided a BAS service: Judgment at [58]-[63]. The Board established that Mr Hinckfuss assisted one identified client to prepare and lodge their BAS for the months ending 31 March, 30 June, 30 September and 31 December 2021. This is a BAS service, within the meaning of that term under the TAS Act. It was also established that Mr Hinckfuss knew or ought reasonably to have known that in assisting that client with the preparation of those BAS, he was providing a BAS service. Mr Hinckfuss charged that client a fee or received a reward for the provision of the BAS service and Mr Hinckfuss was not a registered tax agent in accordance with the TAS Act to provide a BAS service.

22    In the Judgment it was also accepted that Mr Hinckfuss did advertise to provide a tax agent service, whilst he was not a registered tax agent: Judgment at [64]-[69].

23    All of these contraventions were deliberate, serious and systematic.

The amount of loss or damage caused

24    Mr Hinckfuss charged fees or obtained a reward in the sum of $43,955.95 for the provisions of these tax agent services and BAS service. This amount has been received by Mr Hinckfuss as a result of his contraventions.

25    After Mr Hinckfuss had lodged returns for all but two of these identified clients, all were audited and some were required to pay additional tax to the Commissioner of Taxation.

26    The contraventions by Mr Hinckfuss did cause loss or damage to the identified clients, including by the fees charged.

Circumstances of the contraventions

27    Mr Hinckfuss assisted the 11 identified clients to prepare and lodge income tax returns or amended income tax returns for the 2019, 2020 and 2021 financial years. These services were engaged in during 2021 and 2022. The provision of the BAS service by Mr Hinckfuss was also during the same period. That is, the contravening conduct was over an extended period and was not an isolated occurrence or incident.

28    Mr Hinckfuss advertised these services and assisted the identified clients to lodge their income tax returns or amended tax returns via each client’s own myGov account (or log in). There is an obviously deliberate intent in lodging those returns in that way, via each clients’ personal myGov account or log in. By engaging in this conduct in this way, it would have the appearance that each client was lodging the necessary tax return or amendment themselves. Further, by engaging in the contravening conduct in this way, the conduct was systematic.

The nature and size of the contravener

29    Mr Hinckfuss is an individual. However, he has not engaged in or participated in this proceeding at all. As such, there is no evidence regarding his ability to pay a penalty, which is relevant to ensure the penalty acts as an appropriate deterrent.

Any cooperation

30    Mr Hinckfuss has not cooperated. He has not appeared in the proceeding at all. Mr Hinckfuss has not accepted his conduct was in contravention of the TAS Act and he has not displayed any remorse.

Any profit or benefit derived from the contravention

31    Mr Hinckfuss charged fees or obtained a reward in the sum of $43,955.95 for the provisions of these tax agent services and BAS service. In these particular circumstances, noting there were 11 contraventions for the provision of a tax agent service and one contravention for the provision of a BAS service, that is significant. Mr Hinckfuss charged one client $11,921 for the services provided, in contravention of the TAS Act.

Past contravention

32    In Tax Practitioners Board v Hinckfuss (2013) 97 ATR 735; [2013] FCA 1168 (2013 Judgment) Dowsett J imposed civil penalties on Mr Hinckfuss of $32,000 for 25 admitted contraventions for the provision of a tax agent service (s 50-5(1) of the TAS Act) and two admitted contraventions for advertising a tax agent service, when he was not a registered tax agent under the TAS Act. Mr Hinckfuss was given time to pay that civil penalty by way of certain instalments the last of which was required on 30 June 2017.

33    Mr Hinckfuss appeared and participated in the earlier proceedings, the subject of the 2013 Judgment, by way of counsel and solicitors. He made submissions, accepted he had contravened the TAS Act, but disagreed as to the penalty which was to be imposed. The Board had submitted that a penalty range of $55,000-$80,000 was appropriate, whereas Mr Hinckfuss submitted that the appropriate penalty range was between $40,000 and $50,000.

34    At the time of the 2013 Judgment, a penalty unit was $110 and the maximum penalty for a contravention of s 50-5(1) (tax agent services) was 250 penalty units and for a contravention of s 50-10 (advertising) was 50 penalty units: 2013 Judgment at [15]. Mr Hinckfuss had received $12,475.31 in fees in connection with those earlier contraventions (broadly the penalty imposed was approximately two and half times the fees received).

35    Ultimately, the penalty imposed was described as $1,200 in respect of each contravention of s 50-5 and a further $1,000 penalty in respect of the contravention of s 50-10.

36    Mr Hinckfuss has been found to have previously contravened the TAS Act and to have contravened some of the same provisions, including advertising. I agree with the observations of Dowsett J regarding the seriousness of advertising, which Mr Hinckfuss has contravened again.

what penalty should be imposed?

37    It can be useful to consider comparable penalties: 2013 Judgment at [16]-[22]; Van Stroe at [28]; Van Dyke at [70]. However, in doing so, caution should be exercised: Singtel at [60] and Yazaki at [237]. It is not to apply some sort of mathematical precision as to the imposition of the penalty: Singtel at [54]. It can assist to appropriately consider properly comparable matters, for consistency and consistent application of the relevant legal principles (outlined above).

38    In Tax Practitioners Board v Caolboy [2020] FCA 1559, Wheelahan J was considering a matter which involved the provision of tax agent services to over 350 clients, involving 519 contraventions of the TAS Act across the years 2016, 2017 and 2018. The fees varied but ranged generally from $110 to $165. There were two outliers of $440. The respondent also had advertised services which were tax agent services (at [25]-[29]). The respondent in Caolboy participated in the proceedings, agreed a statement of facts, and the parties had (subject to the court discretion) agreed an appropriate penalty. Although the respondent did not have a history of any previous contraventions, she persisted with her contraventions after committing to the Board that she would not charge for providing tax agent services, whilst not registered. The penalty imposed was $40,000.

39    In Ordiales there were 636 contraventions. The penalty imposed was $236 per contravention, amounting to a total penalty of $150,096. The fees charged ranged from $50 to $100, totalling an amount received from the contravening conduct of $48,665. This was in relation to contravention spanning July 2018 to September 2021. The respondent had cooperated and an agreed statement of facts was provided to the Court. She also provided evidence of her current financial circumstances.

40    In Williams there were 73 contraventions of providing a tax agent service for a fee or reward whilst not a registered tax agent. The respondent cooperated with the regulator, admitted the conduct constituting the contraventions and had no history of previous contraventions. The amount earned by way of a fee or reward for engaging in the contravening conduct was $7,300. This was in relation to 51 named clients, charging a fee ranging from $50 to $400 (at [21]). The penalty imposed was $80,000.

41    In Van Stroe there were 531 contraventions of providing a tax agent service for a fee or reward whilst not a registered tax agent. The respondent did not participate in either the liability or penalty hearing. As such, the Court did not have any evidence as to her circumstances, including her financial circumstances. She also did not cooperate with the regulator. However, she did not have any prior history of contravening conduct under the TAS Act, but had been previously the subject of a warning by the Board. Generally, the respondent charged $180 for the services performed in contravention of the TAS Act, which meant she received some $99,590 from clients. The penalty imposed was $230,000.

42    In Van Dyke there were 3,359 contraventions which resulted in fees received of some $1,658,500 (at [22]), generally charging $500. The contravening conduct occurred from September 2019 to July 2023. The respondent participated in the proceedings and entered an agreed statement of facts for the Court, with the regulator. There was evidence before the Court of the respondent’s circumstances including his financial position (which included that he was bankrupt). The penalty imposed was $1,800,000.

43    The current value of a penalty unit is $330. The maximum penalty for a contravention of s 50-5(1) or s 50-5(2) of the TAS Act (being the provision of a tax agent service or BAS service whilst not a registered tax agent) by an individual is 250 penalty units. That is a maximum penalty for each contravention of $82,500. For the 11 contraventions, this would amount to a maximum penalty of $907,500.

44    The maximum penalty for a contravention of s 50-10(1) of the TAS Act (for advertising), by an individual is 50 penalty units. That is a maximum penalty for a contravention of $16,500.

45    The Board seeks a total penalty of $250,000. This it was submitted was appropriate in all the circumstances including the earlier contraventions and the amount earned by way of the contravening conduct.

46    Mr Hinckfuss has not participated in these proceedings, at any stage. He has not expressed any recognition, regret or remorse for his conduct. He has also not cooperated with the Board, at any stage of this proceeding.

47    Mr Hinckfuss has been found to have contravened the TAS Act, again. The overall consideration of deterrence must be weighed heavily in favour of a greater penalty. The deterrence must not only deter Mr Hinckfuss from yet again contravening the TAS Act, but it must act as a general deterrence to those others who have already contravened the TAS Act. The deterrence must clearly recognise that continuing to contravene the TAS Act will be met with significant penalties. The penalties to be imposed cannot be an amount which could simply be absorbed as a cost of doing business.

48    The current financial circumstances of Mr Hinckfuss are not known. Therefore, there is an absence of evidence to assist in weighing the amount of penalty with his financial position, so that the penalty will properly act as a deterrence.

49    The value of a penalty unit has tripled since the 2013 Judgment.

50    The contravening conduct engaged in was deliberate, serious and systematic. It was done in a way which was designed to go undetected. It was also done in circumstances where Mr Hinckfuss had already been the subject of orders and penalties for contravening conduct under the TAS Act.

51    The total penalty to be imposed will be $150,000. Broadly, this is $144,000 for the 11 contraventions of providing a tax agent service and a BAS Service (being 12 contraventions), and $6,000 for the contravention for advertising. Although the maximum penalty for advertising is relatively less, it is still serious. It is the process by which Mr Hinckfuss alerted members of the public to his services being available. Further, this was in circumstances where he had already been found to have contravened provisions of the TAS Act, including the provision regarding advertising.

52    As a check, and considering this in total, the following can be observed. This equates to $12,000 for each contravention of providing a tax agent service or a BAS service. The evidence is that Mr Hinckfuss charged these clients fees which ranged from $1,151 to $11,921, in total. The overall penalty is approximately three and half times the amount earned from engaging in this contravening conduct. It is also 10 times more than the penalty imposed by the 2013 Judgment. Since then a penalty unit has increased by three times, Mr Hinckfuss earned significantly more fees per service (up from approximately $500 for the 25 contraventions in the 2013 Judgment, to approximately $3,700 for the 12 contraventions) and this is repeated contravening conduct. Further, Mr Hinckfuss has not cooperated with the Board or assisted or appeared before the Court at all.

53    In all of these circumstances, this is an appropriate deterrent, specifically and generally. It should mean that the penalty is not simply a cost of doing business, on any of the services provided and it provides an appropriate deterrent for repeated contraventions of the TAS Act.

54    Finally, the Board seeks its costs. There is no reason why the Board should not have an order for its costs, including reserved costs.

Associate:    

Dated:    30 September 2026