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The Australian Taxation Office (ATO) and the Tax Practitioners Board (TPB) have developed new guidelines on client identity verification, which will also help improve security to stop criminals from committing tax fraud by stealing taxpayer identities.
“We are increasingly concerned that criminals are committing tax refund fraud by stealing data and impersonating taxpayers,” ATO deputy commissioner, William Day, said.
“Protection of privacy and information is important for all Australians. Tax Practitioners have a trusted role and these new guidelines will further help them to meet their obligations to secure the personal and financial details of their clients.”
A cyber-security incident can have serious financial consequences for its victims, whether they are an individual, small business or large company. The TPB and ATO have consulted extensively with industry and tax practitioners in the development of these guidelines.
The TPB has released proof of identity (POI) guidance external link to help tax practitioners verify their clients’ identities and thereby reduce the risk of identity theft and tax fraud. The ATO has also released the strengthening client verification guidelines that complement the TPB’s guidance and are intended for registered tax practitioners using online services for agents or practitioner lodgment service software.
The TPB will soon be running a free webinar with the ATO, to explain the POI requirements to tax practitioners. Details of the webinar will soon be published on the TPB website external link.
The guidance has been developed with the ATO and TPB to support tax practitioners in adopting a practical and robust proof of identity process.
“In a period where cybercrime is becoming increasingly prevalent, maintaining best practices for client verification is vital. The TPB guidelines outline appropriate requirements for verification – this includes defining the documents to be sighted, maintaining records and recommendations about achieving remote verification of clients,” chair of the TPB, Ian Klug AM, said.
The ATO and TPB will conduct additional consultation to support tax practitioners with transitioning to the new guidelines, which are intended to become minimum standards in due course.
Mr Klug noted that many tax practices have already implemented robust proof of identity systems as part of their risk management and governance processes.
“I encourage other tax advisers to review and update their systems as soon as possible. After an appropriate time for education, consultation, and transition, we will formalise these guidelines and their date of effect,” Mr Klug said.