Business owners are being urged to check that their tax agents are registered, after one was found to have falsified and inflated deductions on client tax returns, putting those clients at risk.
The Tax Practitioners Board (TPB) obtained the Federal Court order against Brisbane man Kent Scott Hacker, who has been accused of operating while unregistered and failed his clients by claiming false or inflated deductions on their tax returns worth thousands of dollars.
Under the court order, Mr Hacker has been banned from charging for any tax or BAS services. Penalties and a final injunction are yet to be determined.
Breaching the laws governing tax agents can attract fines of up to $52,500 for individuals for every breach, and up to $262,500 for companies, the TPB noted in a statement.
Michael O’Neill, head of the TPB, said that unregistered tax agents potentially expose their clients to hefty penalties and tax bills, if returns and deductions are incorrectly lodged.
“Over the past six months, the TPB has reviewed 75 cases of complaints about unregistered tax advisers who are failing to provide legal and ethical advice to their clients,” Mr O’Neill said.
Those investigations have previously led to the registration of two other tax agencies being terminated, both of which were found to have withheld client tax refunds.
Meanwhile, another unidentified firm had its registration suspended for one year after the TPB identified a shortfall of more than $100,000 in tax payments owed to clients.
Mr O’Neill said that anyone is able to look up the registration status of their tax agent on the TPB register. He urged anyone who finds themselves using an unregistered tax agent to come forward.
“Clients who are already caught up with an unregistered adviser should urgently review their affairs, and if required, contact the ATO,” he said.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.