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Tax agent caught up in identity theft and tax scam

Tuesday, March 31, 2015

Tax agent caught up in identity theft and tax scam

A registered tax agent, Hansig Kim of Sydney, NSW was unwittingly caught in a tax scam which resulted in Mr Kim’s tax agent registration being terminated and the loss of his business.

The Federal Court of Australia ruled last week that Mr Kim had been reckless in carrying out his duties as a registered tax agent and imposed a fine of $4,000 for making false or misleading statements to the Commissioner of Taxation.

During 2013, Mr Kim was approached by unidentified persons and asked to prepare and lodge 79 income tax returns based on tax payer’s information. This included tax file numbers, addresses, employer’s ABN and summaries supposedly signed by the authorised taxpayers.

All the documentation was false and the unidentified persons were attempting to fraudulently obtain tax return refunds based on false documentation and stolen identities.

Mr Kim failed to undertake the necessary checks to ensure that the information provided to him was true and correct. He did not have contact with the individual taxpayers and did not use the ATO tax agent portal to check the relevant taxpayer details. The Court found that Mr Kim’s conduct was reckless rather than dishonest. The Court imposed a $4,000 penalty and ordered him to pay the Tax Practitioners Board (TPB) costs.

The TPB believes this case sends a strong warning to all registered tax agents, particularly as tax time 2015 approaches.

“Registered tax agents need to be aware that these types of scams are on the increase. This is the second similar case in the courts in the last two weeks. Now, more than ever, agents need to be vigilant when taking on new clients. As you can see from this case there are serious consequences if tax agents do not take reasonable care to ensure that the information provided by clients is accurate,” said Russell Smith, Acting Chair of the Tax Practitioners Board.

The public are encouraged to make a complaint to the TPB if they feel a registered tax practitioner is not providing services to an appropriate standard, or if they are aware that a person is providing a tax agent or BAS service for a fee whilst unregistered. Complaints can be made at the TPB make a complaint online form.

ENDS

Further information about the Tax Practitioners Board

The TPB regulates tax practitioners in order to protect consumers. The TPB aims to assure the community that tax practitioners meet appropriate standards of professional and ethical conduct.

Contact: Communications [at] tpb.gov.au (Communications) on 02 6216 8313.

Follow us on Twitter @TPB_gov_au

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