Why you be careful choosing a Tax Agent!
Updated: Feb 3
This is my experience as an accountant and registered tax agent where I learned the ropes at a leading father and daughter accounting firm situated in Goodna QLD. My Father, my sister.
I am a tax agent registered with the Tax Practitioners Board (TPB).
The responsibility of the TPB is to monitor Tax Agents and to issue sanctions to dodgy tax agents. This is a great theory though in reality the boards powers are limited.
The TPB are making plenty of noise around termination of dodgy tax agents, however, it would be great to see the number of tax agents that have this overturned. These numbers are not published.
Tax agents pay a lot of money to be registered with the TPB and it really is a shock to see how many agents that find themselves in compromising situations get off with a slap on the wrist.
As a taxpayer, how on earth are you suppose to know who is lodging your tax returns when the system is full of varying degrees of honesty and integrity, or lack of!
Below is an extract of his first incident with the ATO:
Click the link below to see the full findings.
The applicant rang Mr Tayao and said: ``You really fucked up this time, Lionel.'' During the course of the conversation, Mr Ray described Mr Tayao as a ``fuckwit''. Mr Ray agreed he said these things.
On the 17th May 2019 to the 10th August 2020 Mr Ray was once again Terminated as a tax agent for failing to comply with the laws that govern our industry. But can you find this information? No, it doesn't seem to be public information, why?
A taxpayer approached the ATO about heir tax returns being lodged without permission. The ATO then took this to the TPB where it seems to have stopped. The witness can not be found and won't continue the pursuit and the agent is reinstated as a tax agent without restriction.
Maybe it was a misunderstanding between the ATO and the TPB which resulted in a 15 month termination.
Does this mean that it never happened? Now it just goes away? Does this set precedence?
If you can get the witness to be quiet it goes away, even when an eye witness to the crime is available, it is dismissed.
The taxpayer seems to have lodged false and misleading documents to a government department and I urge the ATO to pursue recovering taxpayer funded investigations and to start legal proceedings against the taxpayer for what looks to be straight out lying to the ATO.
You will find that this might extract the truth.
There are many tax agents who do the right thing, for what reason? A tax agent seems to be able to go rogue and suffer minor punishment and continue to trade.
An agent can have multiple agents working for them and this was a strategic move to change the lodging agent in intervals. This was to interrupt the ATO data matching on Taxpayers. If the taxpayer claims similar claims with different agents then it can be seen to be more legitimate.
It was clever, though the time spent changing clients over was quite a process but took the heat off the current agent.
For example, The ATO will use the data over a few years:
Year 1 - Average Claims $5000, Year 2 - Average claims 4800, Year 3 - Nil = Average of $3266.
Year 1 - Average Claims $Nil, Year 2 - Average claims Nil, Year 3 - 5000 = Average of $1666.
If the agent claims over the average then the agent is seen to be higher risk.
Data matching is a fantastic tool that the ATO use to find risky taxpayers and to assist in getting tax agents in order, one that the public relies on for the integrity of our industry.
I was an employee that was trying to learn the ropes of our industry and listened to the knowledge of more experienced tax agents.
The TPB didn't even know that I worked there! It is against the rules to not declare each agent in a business.
Though, I was placed as a supervising agent for the business even after 6 months of exiting the business, what a mess.
Les Ray & Associates were known for being the tax agent that gets the best tax returns. If your agent is this then they are more likely a high risk agent that will get you unwanted attention.
If you are a taxpayer that is looking for the best tax returns without keeping evidence, or happy to disregard the Australian Tax Laws then finding these agents isn't too difficult and you should go to them.
I am appalled at the lack of authority that the TPB seem to have and no doubt there will be a please explain on my behalf, but hey I believe this to be public interest.
How can the Australian public and good quality tax agents have confidence in our Board when the agency that received our membership fees are in charge of disciplinary action.
I would like to see complete separation for these roles as it can look like there is a conflict of interest.
If there are less agents then there are less membership fees for the TPB - I just say it how I see it when this type of thing happens.
Now the fun stuff.
How many signatures do you need to give before you can have your taxes lodged? Do you actually read it? Does your tax agent explain in detail the reason for so many of your signatures?
These are to protect the tax agent, not you! Which adds another layer of security over tax agents. I've seen no signatures on returns and false diary notes and tax refunds put into the agents personal bank account (Agents need to have a trust account that gets audited to receive client monies - Your tax Mate and Les Ray do not have these trust accounts)
You will need to pay the ATO any difference in refunds plus penalties and the tax agent still collects their fees plus any fee to represent you in an audit. Win Win for the Agent
If you don't want to take the risk but still want to use a tax agent then try to find a sole trader tax agent.
The sole traders do not have multiple strategies to overcome dodgy behavior. It is in their best interest to maintain the integrity of the profession as a termination or even a suspension will result in no fees and no business. The same can not be said for larger businesses with multiple agents.