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An unregistered preparer, who used taxpayers’ myGov accounts to lodge tax returns, has now been arrested after a joint investigation by the Tax Practitioners Board and the ATO.
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Unregistered agent arrested as Treasury considers new TPB sanctions
07 August 2019
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6 minute read
After receiving complaints from taxpayers in December 2018, the TPB and the ATO set out on a joint investigation that ultimately led to the unregistered tax agent services provider being arrested.
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The TPB could not disclose details about the unregistered preparer, other than the fact that he was discovered to have targeted the backpacker community.
Unsuspecting clients provided their myGov details, and subsequently discovered their refunds were paid directly into the unregistered preparer’s bank account. In many cases, the work-related expenses reported by the clients were significantly overstated.
The TPB said the case demonstrated the ability for various agencies to work together to crack down on unregistered preparers.
Late last month, the ATO said it was concerned about the number of people claiming to be tax agents, often promising refunds that sound too good to be true or providing discounted services much cheaper than legitimate registered tax agents, vowing to work closely with the TPB to stamp out the illegal practice.
New TPB sanctions
The recent arrest comes as an independent review of the TPB considers additional compliance actions to help the TPB deal with unregistered agents.
The TPB concedes that its existing regulation of unregistered practitioners has been limited due to restrictions in the TASA and funding limitations.
It notes that the only compliance action available to the TPB to deal with unregistered tax practitioner behaviour is to apply to the Federal Court — a time-consuming and costly process.
Preliminary views explored in the discussion paper include allowing the TPB to issue infringement notices and enforceable undertakings, as well as name and shame names and associated entities of unregistered tax agents.
The paper also suggests prohibiting tax practitioners from employing, paid or otherwise, individuals who have been either suspended or permanently disbarred from the tax profession.
It also notes the suggestion that Victorian barrister Chris Wallis put forward to Accountants Daily to implement a mechanism to foil a business model used by unregistered practitioners.
All parties with an interest in the review are urged to make a submission on the discussion paper, which can be found on Treasury’s website.
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