However, a treasury discussion paper released on Thursday on the operations of the tax board pointed to some of the challenges with tracking these operators.
“Submissions highlighted the limited sanction tools available to the [board] to take action
against unregistered agents and called for a greater set of remedies or penalties be made
available,” the paper said.
The paper questions whether there should be a way of publishing the names of known unregistered operators to better inform the public.
Earlier this month the Australian Taxation Office warned about the prevalence of unregistered agents logging in to individuals’ MyGov accounts in order to complete their returns. Legitimate tax agents have no access to MyGov credentials and complete returns via the professional tax agent portal.
The risk of unregistered agents is also significant in cases where businesses have chosen to use an unlicensed professional, the Tax Office said.
“Small businesses who use an unregistered preparer are taking a big risk as the unregistered preparer likely does not have the skills, qualifications and experience to make sure they can get their tax right,” an spokesperson said.
“In some cases the situation may be even worse, the person offering the taxation services [could] be actually using the business operator’s personal information for fraudulent or criminal activity.”
Both regulators have called on the public to come forward and dob in any professional that they believe might be operating outside the bounds of the law.
Tax experts say relying on the public to come forward poses challenges.
“The question is, how is this [unregistered agents] going to be picked up? Most people who go to see someone don’t even understand the tax agent regime,” tax counsel at Tax and Super Australia, John Jeffreys, said.
When an individual taxpayer claims a deduction for managing their tax affairs, they are not prompted to answer who they used, Mr Jeffreys said.
“If you paid a tax agent, they could ask ‘what is the tax agents’ number?'” he said.
At the start of July, the Tax Practitioners Board said it was investigating 37 cases relating to unregistered agents.
“An unregistered tax service provider cannot charge you for preparing or lodging your tax return, and we recommend clients check their tax practitioner is registered on the public register,” a tax board spokesperson said.
Emma is the small business reporter for The Age and Sydney Morning Herald based in Melbourne.