Q: I read that some tax agents got into trouble for not passing on tax refunds to their clients. How do I make sure I get what is due to me when I use a tax agent to prepare my tax return?
A: Taxpayers should remain vigilant to ensure that they are getting their refund entitlements after two registered tax agents were terminated recently for withholding client refunds.
The Tax Practitioners Board (TPB) and the Australian Taxation Office (ATO) launched a joint investigation after receiving 19 consumer complaints that two online registered tax agents had not passed on their 2017/18 tax refunds to their clients.
QTR Accountants Pty Ltd and Nicoh Group Pty Ltd have had their registrations cancelled over alleged theft of tax refunds as a result of the investigation.
The investigation initiated an additional 200 taxpayer complaints which supported the decision to terminate the registrations.
“It is extremely disappointing that registered tax practitioners showed such disregard for the professional and ethical standards we aim to uphold,” Ian Taylor, chair of the TPB said.
The TPB aims to protect clients of tax services by ensuring that practitioners abide by its standards.
“Tax practitioners must meet strict standards of fitness and propriety to register with the TPB, and we expect that they will continue to meet these standards,” Taylor said.
To ensure that you are getting everything that you are entitled to from your tax refund, the TPB encourages the following steps:
It is important to ensure that the tax practitioner is a registered agent by checking the TPB register.
The TPB recommends taxpayers confirm with their tax agents that any refunds they receive will be transferred directly to their bank accounts, rather than being passed on to the agent directly.
The TPB also recommends that there be a written agreement (often called a ‘letter of engagement’) between the taxpayer and the tax agent that sets out the terms and conditions of the arrangement. A letter of engagement helps the taxpayer and tax agent to understand the expectations agreed to in the contract.
It will define the rights and obligations of both parties and set out in writing the agreed terms and conditions for the work to be done and assist in avoiding uncertainty and misunderstandings.
The Tax practitioners board encourages taxpayers who have been affected by the possible theft of tax refunds from an online service to submit a complaint to the TPB and contact the Australian Cybercrime Online Reporting Network (www.acorn.gov.au).