ATO To Probe Professional Advisors’ Role In ID Theft Cases

by Mary Swire, Tax-News.com, Hong Kong

02 May 2005

The Australian Tax Office is investigating a rise in cases where fraudsters are using accountants and other professional advisors to add credibility to identity theft, which has become the most common means to commit tax fraud in Australia.

Speaking at a Canberra conference last week, deputy tax commissioner Michael Monaghan stated that identity takeover has now superseded identity creation as the most popular means to defraud the tax office, adding that ID theft now accounts for almost three quarters of tax fraud cases.

Perpetrators are stealing names, tax file numbers and other personal details from bank accounts, mobile phones and post office boxes.

The ATO is responding to this growing problem with the creation of a new unit, which will be staffed by experts in forensic accounting, auditing and intelligence analysis.

In particular, the tax office's crackdown is focusing on professional advisers and agents who are being used to add credibility to fake identities.

"We are also seeing that fraudsters may attempt to legitimise their fraudulent entities by using genuine accountants and other service providers and maintaining a genuine business relationship with them," Mr Monaghan noted.

He went on to claim that the tax authorities have seen evidence of complicity among some professional advisors in the use of stolen IDs to dupe the tax man.

"There have been cases detected of professionals, such as tax agents, migration agents or financial planners, having access to individual identity details and using these to submit fraudulent tax returns," Mr Monaghan observed.

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