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Hello everyone. I'm Michael Monaghan, in charge of the Tax practitioner and lodgment strategy
line in the ATO. I just wanted to say a few introductory things about online security.
You would have seen a fair bit of information lately about online security and the importance
of it. What I like to do is remind people that 'online'
is just another way of working. You wouldn't go home on the weekend and leave the back
door of your business practice open for anyone to walk in. Similarly, don't leave your online
world open.
The security of it is very important; you're part of a trusted system with your clients
and with the Tax Office. So we do take it very seriously and where we find that people
aren't taking security seriously themselves, it does become an issue that the Tax Practitioners
Board would need to look at.
And so from this introduction, Ian Taylor, Chair of the Board, is going to talk in a
bit more detail about this issue. So thanks for your time.
I'm here today with Ian Taylor, the Chair of the Tax Practitioners Board since January
this year. Ian, welcome. Four years after the Tax Practitioners Board was created, is
there still a perception by some that you are part of the ATO?
There is Tracy, but the Tax Practitioners Board is an independent organisation separate
from the ATO. We are also known as the TPB. We work under our own legislation and set
our own policies to register and regulate tax practitioners, that is, tax agents and
BAS agents.
The vast majority of tax practitioners provide a great service to their clients but we do
take compliance action where a tax practitioner falls short of these professional and ethical
standards.
The TPB recently investigated a number of tax agents for lodging income tax returns
containing false payment summaries and other false information.
I understand that income tax returns were lodged in the names of genuine taxpayers whose
identities had been stolen.
That's correct, yes. The TPB in recent years has had to investigate a small number of tax
agents who've been caught up in these schemes. A common scenario is where third parties had
approached registered tax agents advising that they were acting on the authority of
a number of other taxpayers.
The third parties then provided false payment summaries and other false details in organised
attempts to defraud the tax system.
If the agents had carried out the most basic checks before lodging the returns, would they
not have been alerted to these stolen identities?
They should have been, but unfortunately in these instances, no they didn't do those checks.
The Tax Practitioners Board investigated and in nearly all cases the tax agents had not
made contact with the taxpayers before lodging their income tax returns, or verified any
of the information contained within the returns and generally charged higher fees than their
normal fee.
So what are the implications or the consequences for those agents involved?
Following the conclusion of these recent investigations, the Board terminated the registration of four
tax agents, suspended the registration of two others, and accepted the surrender of
a third agent. In addition, the Board will be lodging applications
with the Federal Court seeking civil penalty orders against three agents whose registrations
were terminated.
So what should agents be looking for, what should they in fact be doing, to avoid ending
up in this sort of circumstance?
As a registered tax agent, they may be approached by third parties asking to lodge income tax
returns on behalf of others in the community. They should be particularly wary of requests
to lodge multiple income tax returns on behalf of community groups, workplace groups, or
overseas students or itinerant workers.
In these situations a registered agent should take reasonable steps to establish the identity
of the person they are preparing the income tax return for and verify the information.
Such steps may include direct contact with the client or through ATO portal access.
And should an agent not be able to confirm the details that they have been provided with,
what is the only safe course of action?
They should explain their responsibility as a registered tax agent and decline to prepare
and lodge that income tax return. If an agent does not take reasonable care
in ascertaining a client's state of affairs, they may breach the Code of Professional Conduct
and could be at risk of breaching a civil penalty provision.
Alright, some words of caution there. Ian, thank you for joining us today.
My pleasure Tracey.
Ian Taylor, Chair of the Tax Practitioners Board.