TPB to step up fight against ‘high risk’ unregistered agents
The regulator will use all of its powers and engage the AFP to track down rogue practitioners, chairman Peter de Cure has said.
The Tax Practitioners Board will ramp up its fight against unregistered agents who illegally operate outside the system in the new year, chairman Peter de Cure has said.
In the TPB’s final webinar for 2024, de Cure said while unregistered preparers were uncommon, they posed significant risks to consumers and created unfair competition for legitimate agents.
“We’re taking the bad eggs out of the system, and hopefully that will help you see an increase in consumer confidence in both yourselves as agents and in the regulatory system.”
“We will use all of our powers under the Tax Agent Services Act (TASA) in terms of combating this type of behaviour.”
TPB statistics showed unregistered preparers made up 4 per cent of investigations in the past year.
The most common issues related to agents failing to meet their personal tax obligations (21 per cent), services being provided competently and whether agents were fit and proper (10 per cent).
“This is a significant focus of work for the TPB, notwithstanding that the small percentage of actual cases, we're focused on this because it's really high-risk behaviour for the consumer,” de Cure said.
The TPB said individuals providing tax agent or BAS services for a fee or reward had to be registered.
Unregistered preparers operated illegally off the grid, promising high returns and refunds but putting consumers at risk and putting legitimate agents at a disadvantage.
“These are the people through acting unlawfully and outside of the system create risk for you,” de Cure said.
“It really is unfair competition with those of you who are registered and are doing the right thing – unregistered prepares often advertise through local papers or word of mouth, and they’re often telling clients and potential clients that they'll get them a bigger refund, and this will generally happen either by making incompetent claims for deductions or making fraudulent claims for deductions for things that their clients aren't genuinely entitled to.”
“They're very high risk in terms of clients on tax affairs, often leaving clients with significant tax debts.”
The TPB also warned about unregistered preparers using taxpayers’ MyGov accounts to complete their returns, when legitimate agents would never access MyGov credentials and instead use the ATO’s tax agent portal.
“That creates real risk for those clients in terms of the ongoing confidentiality and privacy of their personal information,” de Cure said.
To crack down on their prevalence, he said the TPB had a “dedicated team working on the risk posed by these unregistered providers”.
The TPB's enforcement approach would involve reviews of complaints, direct interactions with offenders, cease-and-desist letters if the illegal behaviour remained unchanged, and communication with affected clients.
“We work proactively to address these compliance issues, de Cure said.
“We will investigate as quickly and efficiently as possible to try and limit the influence over the tax system at large and to protect the clients.”
“We will use formal litigation and seek civil penalties or injunctive relief as soon as we have sufficient evidence, and we work very closely with our partner agencies, the ATO, the Federal Police, etc, to try and pursue any relevant criminal action that we can.”
In August, the TPB obtained a $1.8 million fine in the Federal Court against unregistered preparer Jayden Van Dyke for preparing 3,359 tax returns over four years.
De Cure said the case “was probably one of the most successful cases that we've pursued” and demonstrated “the danger of unregistered tax preparers but also the impact that it can have on you”.
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