The ATO’s ‘Individuals not in Business Tax Gap Report’ has found that 78% of tax agent prepared returns have errors. Paul Drum, CPA Australia head of policy, said ‘The high adjustment rate for agent prepared returns, particularly for work-related expenses, was alarming and disturbing. It is also disturbing that the ATO is saying some of it is about agents requiring education, that they don’t understand the law and in the most egregious cases, they are intentionally disregarding the law.’
The report highlights that while the majority of mistakes made by agents are avoidable, the ATO is concerned to see a minority of tax agents exaggerating or falsifying claims to attract clients or retain their market share. The ATO works alongside the Tax Practitioners Board to identify and closely monitor these agents, and will take action to protect the integrity of the tax system.
Types of action might involve tax agent education, penalties and fines, suspension or even termination from the industry.