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ID checks ‘awkward but essential’


A fresh wave of clients from July will encounter tighter verification tests at tax agents.

By Philip King4 minute read

Soon-to-be-introduced proof-of-identity checks for clients at tax practitioners are a vital security step even though they can be awkward, said the senior manager of tax policy at CPA Australia.


Elinor Kasapidis said the ATO’s crackdown on GST fraud highlighted the need for safeguards and CPA Australia members knew the importance of system integrity for protecting their practices too.

The ATO recently said it was pursuing $850 million in dodgy GST claims and was tightening controls around ABN and GST registration.

Ms Kasapidis said scammers on social media caught out the unwary with ads for “easy GST refunds”.

“Because we have a self-assessment system and we do need to have the ability to register a business and do our taxes efficiently, these people find weaknesses,” she said.

“Quite often the ATO has indicated that many of these people may not have understood what they were getting themselves into.

“It does highlight that people may walk into the practice and ask to register a business and they may give you information that creates a refund. Tax agents do have to make sure they verify their clients, make sure that everything checks out.”

The TPB and ATO finalised client verification guidelines in February that will be made mandatory in the latter half of this year, and they stressed that the responsibility to check ID lies with the individual practice.

While there are concerns that tighter GST refund scrutiny by the ATO might punish legitimate clients – with Accountants Daily reporting this week on one case where a $640,000 refund was frozen for a month – individual practices formed the first line of defence, Ms Kasapidis said.

“It’s also about taking reasonable care – so asking the questions, ‘What is this business? Why do you need an ABN? What are your intentions with this? And what are you planning to do?’” Ms Kasapidis said.

She said practices needed to prepare for a fresh wave of clients seeking to be registered from July to the end of October.

“It is always difficult to question someone about their identity or to ask them lots of questions when theyre coming to you as a paying customer for a service,” Ms Kasapidis said.

“Sometimes clients may be a little bit questioning of why youre asking them so much. But it is to protect your practice as well as your own reputation.”

She said the ATO would then apply its own risk analysis in light of the GST fraud.

“Why is this [refund] occurring? What have you bought? They’re probably looking for things like that are unusual, so a new business claiming funds or an activity statement that has a refund amount on it when normally there wouldnt be, given their past lodgment,” Ms Kasapidis said.

“So there are all these different kinds of risk indicators. And certainly records are everything.

“So the more you have those in order and easily accessible, and you can demonstrate the result, then you should be okay.”

ID checks ‘awkward but essential’
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Philip King

Philip King


Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

You can email Philip on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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