Unregistered tax agents

An Australian tax crisis for one defrauded taxpayer – $27,000 and more out of pocket.

A small business owner from Brisbane, Queensland, unknowingly used the services of an unregistered tax agent (TA) who filed tax returns on behalf of the taxpayer with additional and unauthorized claims for deductible expenses. It is alleged that substantial refunds were paid into the bank account of the alleged tax representative, who then transferred the expected refund to the taxpayer. The IRS held the taxpayer liable for the total amount of the refunded funds and disallowed all tax deductions. Claimed on the 2007, 2008 and 2009 income tax returns. As a result, the taxpayer had to refund more than $27,000 to the IRS before penalties and interest were due. The taxpayer received approximately half of this amount as a refund.

Also Check: Tax Agent in Melbourne

The alleged fraud went as follows. The tax agent prepared tax returns using the ATO’s electronic self-filing services and notified the client of his anticipated refund. Unfortunately, many of the deductions claimed were illegitimate even at that point, inflating the actual refund claim. He then added other claims that inflated the refund and had the refund deposited into a bank account he controlled. After receiving the refund, he forwarded the original estimated amount to his client and kept the balance. Several thousand dollars per year, for himself.

I hope he locates all the records he kept of his clients’ tax affair. Or they will be stuck with the costs forever for many legitimate claims. Trusted Tax Accountants in Tarneit

How did this happen? Several factors worked in the fraudster’s favor. But the ATO has monitoring systems in place to detect abuse of the systems.

Australia has a system of self-assessment. Nothing is checked until refunds are issued, and then primarily only because tax returns. Differ significantly from those of other businesses or professions.

Electronic filing directly with the IRS allows unregistered tax agents to file tax returns for their clients.

Direct refund of taxes to electronically notified bank accounts.

The Treasury’s position appears to be that taxpayers should make sure that the tax agent is properly registered. Which can be done by simply searching for registered tax agents on the Australian Taxation Office (ATO) website. In theory this position is fine, but in reality very few people would. Check the status of someone claiming to be a registered agent unless there were reasons to suspect otherwise.

In Australia, there is now a new regulation for tax agents. Only registered agents may charge a fee for providing tax services and represent clients at the ATO. Clients who use registered tax agents now have some protection against errors and late filings caused by registered tax agents.

Ask to see the tax agent’s certificate or request the registered number and compare it. To the register on the Australian Taxation Office website.

The moral of the story: check the reputability of your tax agent, take responsibility for your affairs. And if your refund seems too good to be true, it probably is. Also keep in mind that fees paid to unregistered tax agents are not tax deductible.

Since the Australian tax season starts on July 1, about 3 weeks from now, be careful. Educate yourself on the rules of the game that affect you and your tax.

Minimize your tax liability by using well-qualified and registered tax advisors. Who are members of the major accounting organizations such as The Institute of Chartered Accountants, CPA’s, NTAA or ATMA. All of these organizations require their members to take regular continuing education courses to stay current.

For more info visit the website: numberspro.com.au