ATO commissioner singles out tax agents for incorrect claims

Mr Jordan said data from the ATO’s random enquiry program found that the over-claiming of work-related expenses was worse in agent-prepared returns as compared to self-prepared returns.

“Some display a lack of competence, or outdated knowledge and practices, or do not take proper care when undertaking their work; others are deliberately scamming or cheating the system,” said Mr Jordan.

“These results are really disappointing. For years I’ve heard how tax agents were guardians of the system – these random enquiry results tell me this is not the case for some agents.

“They are not fulfilling their duty as a registered tax practitioner in line with the Tax Practitioners Code of Conduct,” he added.

“In reality, they are selling their clients short – they are not bringing their expertise, nor taking care beyond reliance or blind acceptance of information given by clients, or even, leading clients to deductions that are not allowable.”

According to the tax office, the work-related expenses gap is estimated to be greater than the large corporate tax gap of $2.5 billion.

Mr Jordan also recalled a comment made on the ATO’s last practitioner webcast as an example of the rampant system abuse.

“One of the comments made during the webcast was ‘I would say if you don’t claim the $300 deduction for your client you are pathetic and are a waste of time as a tax agent. You should retire.’,” explained Mr Jordan.

“I understand that agents want the best for their clients, and that they are also competing for business.

“But not doing the right thing might be a “sugar hit” for your clients in the short term but in the long run is not good for your clients, not good for the profession and not good for the system. High integrity agents encourage, enable and ensure their clients do the right thing.”