The Australian Taxation Office (ATO) has warned taxpayers using a tax agent to prepare their tax return this year that it’s a good idea to check they are registered - otherwise they could find themselves with a large tax bill or worse, facing penalties.
According to the ATO, only a registered tax agent can charge a fee to prepare and lodge a tax return. Unfortunately, however, there are some people out there who pretend to be registered tax agents when they are not.
Tax Commissioner Michael D’Ascenzo said the Tax Office looks closely at tax returns prepared by people who claim to be tax agents but are not registered with the Tax Agents’ Board.
“Using an unregistered tax preparer who claims to be a tax agent will increase your chance of being audited by the Tax Office,” Mr D’Ascenzo explained, adding:
“Your tax return is your responsibility even if someone, including a tax agent, helps prepare and lodge it for you. While anyone can lodge and prepare a tax return on your behalf only a registered agent can charge a fee for their services."
“The Tax Office looks for unusual patterns and uses analytical tools to identify returns prepared by people who are not registered tax agents. If we find major inaccuracies when reviewing these returns we may ask the taxpayer for receipts or extra information to verify their claims."
“This could result in significant increases in tax payable as well as the possibility of interest and penalties being applied.”
Mr D’Ascenzo said in order to protect both the community and the tax system the Tax Office will continue to pursue unregistered preparers who break the law.
“A person caught operating illegally as a tax agent may be prosecuted and receive a penalty of up to AUD22,000 (USD17,906),” he warned.
Last year, the Tax Office investigated 205 claims of people acting as tax agents and 28 were successfully prosecuted – this was an average of more than one successful prosecution a month.
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