On 9 March 2016 47 year-old former accountant and tax agent Christopher Kirkwood of Mackay Queensland was sentenced to two years and six months imprisonment to be released after serving nine months after he pleaded guilty to three counts of obtaining a financial advantage by a deception in the District Court at Mackay.
Mr Kirkwood was the sole director of Wellsprings Financial Services Pty Ltd This Company was Trustee for Wellsprings Financial Services Trust (the Trust) which operated an accountancy and tax agent practice in Mackay known as CR Kirkwood & Associates (the Business). Mr Kirkwood was the principal of the Trust and the Business. The beneficiaries of the Trust were Mr Kirkwood, his wife Katrina Kirkwood and the Company.
Between 29 December 2005 and 15 May 2008 Mr Kirkwood lodged income tax returns with the Australian Taxation Office (ATO) on behalf of the Trust for the financial years 2005, 2006 and 2007. On each of these tax returns Mr Kirkwood falsely declared that the Trust had made distributions of income to clients of his business. These clients were not beneficiaries of the Trust and Mr Kirkwood was aware that these clients had carried forward losses from previous years available to offset the trust distributions. The lodgement of these false tax returns resulted in Wellsprings Financial Services Pty Ltd being liable to pay less income tax.
The total shortfall in income tax for the financial years 2005, 2006 and 2007 arising from the lodgement of these false tax returns was $377, 732.
Mr Kirkwood was sentenced in relation to the following offences:
3 counts of obtaining a financial advantage by deception contrary to section 134.2(1) of the Criminal Code (Cth)
Christopher Kirkwood was sentenced to two years and six months imprisonment to be released after serving nine months upon a single recognisance in the sum of $2,000 conditioned that he be of good behaviour for a period of two years. Further ordered pursuant to s21B of the Crimes Act 1914 (Cth) that he pay reparation to the Commonwealth in the sum of $377,732.
In sentencing Judge Harrison noted that Mr Kirkwood was a chartered accountant running his own firm and had tried to stave off payment of $377,732 over three years. Judge Harrison noted that the tax system relies upon the honesty of taxpayers and that this type of fraud impacts upon the integrity of the whole taxation system. He stated: “I have to take into account, however, the deterrent effect that the sentence or order may have on any other persons, and this is very critical in a case like this, and the deterrent aspect of sentencing assumes considerable weight because of the dishonesty associated with what you did and the need to send out the message to those in the community, particularly people working as accountants and tax agents and who are conducting the affairs of other people as well as their own affairs, that infringements like this will result in condign punishment.” However, Judge Harrison noted that Mr Kirkwood had otherwise led a morally blameless existence and was a foster parent and member of the Seventh Day Adventist (SDA) Church. He took into account the impact a sentence of imprisonment would have on his family and his future work with the SDA Church and said that it was significant that Mr Kirkwood had made full reparation on the day of sentence. He noted his level of cooperation was mixed and his answers during interviews was at times bordering on “pathetic”.