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ATO and TPB target identity fraud in partnership with tax profession

ATO and Tax Practitioners Board target identity fraud in partnership with tax profession

Joint media release between the Australian Taxation Office and the Tax Practitioners Board

The Australian Taxation Office (ATO) and the Tax Practitioners Board (TPB) are focused on measures to intercept attempted identity fraud targeted at registered tax practitioners and their clients. New guidelines will strengthen and modernise the practices and controls that registered tax practitioners follow when verifying the identity of their clients.

The ATO has seen an increase in attempts by criminals to commit refund fraud by stealing the identities of taxpayers which has coincided with an increased reliance on technology and remote working practices. Having your identity compromised can have devastating financial consequences.

A lack of consistency to verifying the identity of clients has left individual tax practitioners vulnerable to attack. Practices that retain client identity documents insecurely are also at greater risk of having these documents stolen through physical break-ins.

The ATO’s draft guidance encourages tax practitioners to voluntarily start adopting the new client verification standard immediately, with the view for the standards to become compulsory in the future following an initial transition period and further consultation with the tax profession.

ATO Assistant Commissioner Sylvia Gallagher confirmed there is not an expectation that tax practitioners need to go back and verify the identity of their entire client base as part of the transitional approach. 'We’re asking that they perform identity checks from this point on, at the next opportunity in their normal dealings with clients.'

Inviting feedback on the TPB’s draft guidance, the TPB Chair Mr Ian Klug AM said, 'We value the support of the tax profession in implementing these important controls to better protect the Australian community from tax fraud through identity crime.'  Mr Klug further said the TPB’s guidance will apply to all registered tax practitioners regardless of whether they use the ATO’s online services or not.

'The Tax Agent Services Act 2009 does not expressly set out minimum requirements for tax practitioners to verify a client’s identity. However, there are implications under this Act if tax practitioners fail to take reasonable steps to ensure the identity of their clients is established. Our draft guidance provides practical guidance and examples so tax practitioners do not fall foul of their obligations and put their registration and business at risk,' Mr Klug said.

Tax practitioners who are unable to successfully verify a client’s identity and suspect potential fraud should contact the ATO immediately on 1800 467 033.

The ATO’s draft guidance is available on the ATO website. The ATO is seeking feedback from tax practitioners. Submissions can emailed to TaxPractitionerConsultations [at] ato.gov.au

The TPB’s draft practice note is available on the TPB website. Submissions can be emailed to tpbsubmissions [at] tpb.gov.au or sent by mail to GPO Box 1620, Sydney NSW 2001.

Submissions are due to the ATO and the TPB by 10 June 2021.

Thursday, April 29, 2021