Risks of using unregistered tax practitioners
You are taking big risks if you use an unregistered tax practitioner to:
- prepare and lodge your tax returns and statements;
- provide you with tax advice; or
- represent you in your dealings with the Australian Taxation Office (ATO).
Tax practitioners include tax agents, BAS agents and tax (financial) advisers. They must be registered with us to provide tax agent services, BAS services or tax (financial) advice services for a fee or other reward.
Listed below are some risks that you face if you use an unregistered tax practitioner to provide you with a tax agent service (which includes a BAS or tax (financial) advice service):
- The practitioner may not be fit and proper or have the required qualifications or experience to provide you with a competent service that meets appropriate professional and ethical standards.
- If the practitioner fails to lodge a tax return or statement on your behalf by the required due date or makes a false or misleading statement to the ATO (for example, by lodging an incorrect return or BAS), and this results in a tax shortfall amount, the ATO may impose administrative penalties on you.
Under the ‘safe harbour’ provisions administered by the ATO, you will not be liable for penalties in certain circumstances, if you engaged a registered practitioner. However you will not be entitled to any ‘safe harbour’ protection if you engaged an unregistered practitioner. For further information, refer to Safe harbour.
- The practitioner may not have appropriate professional indemnity insurance cover to compensate you if you suffer loss due to an act, error or omission that results from a service they provide.
Sharing your myGov account details puts your personal and financial affairs at risk!
The TPB is investigating a number of cases involving unregistered practitioners posing as legitimate registered practitioners, who lodge tax returns on behalf of their clients. Those practitioners operate, often by accessing the myGov accounts of their clients and lodging their returns through myTax.
Please note that myTax should only be used by a taxpayer to lodge their own tax return, and is not an approved lodgement channel for registered tax practitioners. A registered tax practitioner also does not require access to their client’s myGov account to act on their behalf.
As such you should take care not to share your myGov password with anyone. Sharing your information (such as your myGov password) with an unregistered practitioner puts your personal and financial affairs at risk.
We protect consumers of tax agent services by registering and regulating tax practitioners, so they meet the appropriate standards of professional and ethical conduct.
Using a registered tax practitioner means they:
- have satisfied the TPB that they are fit and proper and have the required qualifications and experience, to be registered to provide you with tax agent services
- are required to comply with the Code of Professional Conduct (Code), which regulates the personal and professional conduct of registered tax practitioners. Amongst other obligations, the Code requires them to:
- account to you for any money or other property they receive on your behalf and hold on trust. This includes tax refunds and other payments received from the ATO, and money you provide to them for a specific purpose (such as paying a tax liability)
- ensure that they provide competent tax agent services to you
- maintain knowledge and skills relevant to the tax agent services they provide
- take reasonable care when ascertaining your affairs that are relevant to the service they provide, and when applying the tax laws to your circumstances
- have appropriate professional indemnity insurance cover to compensate you if you suffer loss due to any act, error or omission by the practitioner.
On Friday 1 March 2019, before Justice Rangiah of the Federal Court of Australia, Mr Kent Scott Hacker undertook to not provide tax services illegally in response to an application brought by the TPB.
The TPB alleged that Mr Hacker was acting unlawfully by:
Mr Hacker’s undertaking to the Federal Court means he cannot provide tax agent services or BAS services to clients for a fee.
The litigation against Mr Hacker continues, and his undertaking will remain in place until the TPB’s application for penalties and final injunction is heard.
Court awarded penalties for breaching tax agent services laws can be as high as $52,500 for each contravention by an individual, and $262,500 for a company.
- Check whether your practitioner appears on the TPB Register.
- If you have already dealt with an unregistered practitioner, you should urgently review your affairs and contact the ATO if required.
- Make a complaint to us.
Last modified: 6 September 2019