Institute of Certified Bookkeepers

Managing Proof Of Identity Checks In Your Practice

Professionals are working in an environment with an increasing reliance on technology, remote work practices, and changing methods to engage with new and existing clients.

It has become crucial that Professional Bookkeepers and now the ATO & TPB require registered BAS Agents manage their day to day practices in a way that ensures you have confirmed the identity and authority of clients or their representatives. By following good practice administration procedures this also minimises the risk of their practice being the target of fraudulent activities against themselves, their business, clients, taxpayers and/or the ATO.

ATO – Practice Administration

The ATO has provided information and instructions about the basics of running your practice, dealing with the ATO and what records you need to keep.

The Practice Administration guide is a resource to assist BAS Agents with the core structures needed to run an efficient and compliant practice. Source: ATO – Practice Administration

The ATO explains the following topics:

BAS Agents will need to provide proof of identity (POI) information when contacting the ATO. POI details may include information from a notice of assessment, lodged return or activity statement provided it is no more than five years old.

When You (the BAS Agent) Contact The ATO

Step 1 – Quote your Registered Agent Number (RAN)

If you phone the ATO on the registered agent phone line 13 72 86 you must provide your RAN.

Step 2 – Identify the account you want to access

You can identify the client account you want to access by providing one of the following:

  • Australian business number (ABN).
  • Tax file number (TFN).
  • Name.

Step 3 – Provide POI for the account

The POI the ATO needs depends on whether your RAN is already on the account and for which taxpayer role, as shown below.

When the ATO Calls You

One of the wonderful ironies has always been that if you ring the ATO then you go through hoops to identify that you are allowed to talk to them about the client but when the ATO rings you, you don't really know it is from the ATO.

As an aside, please be careful of scam emails and phone calls pretending to be from the ATO and offering refunds as long as you provide the bank account details.

ATO officers will identify themselves clearly by providing their full name and the section in which they work. If at any stage you have doubts about the person contacting you being an ATO employee or you want a more formal confirmation, ask for the officer's contact details, including:

  • Their full name.
  • Their extension number, if available.
  • The name of their team leader and their extension number.

When the ATO calls you are quite within ATO policy and guidelines to seek information from the ATO officer that allows you to call them back. In that way verifying that you are ringing the ATO and dealing with an ATO person.

BAS Agents can ask the officer if you can phone them back on 13 28 69 between 8.00am and 5.00pm, Monday to Friday. You can also ask the person phoning to confirm their identity by either emailing you or sending a secure mail message via Online Services for Agents(OSfA).

If you cannot confirm the identity of an individual, or you suspect fraudulent documents are being used, you can notify the ATO of the incident so that they can stop any other attempts to use that identity.

POI Requirements by Access Type

Access type 1:
Registered agent listed on the client's account for the role
Access type 2:
Registered agent listed on the client's account but not for the role
Access type 3:
Registered agent not listed on the client's account
You must provide details from an ATO generated notice or lodged return that is no more than five years old and relates to the client, including:
  • a notice of assessment sequence number
  • a document identification number (DIN)
  • a correspondence reference number
  • the date and name or title of a letter or notice we have sent you that may or may not have a unique identification number but can be confirmed by our systems
  • income
  • deductions claimed.
You must refer to an ATO generated notice or lodged return that is no more than five years old and is relevant to the role. You must also provide one of the following relating to the client:
  • their TFN (if not already provided as an identifier)
  • their date of birth, if applicable
  • their address – business, postal or email.

Where another registered agent is listed on the account for a role, the notice you refer to must be more recent than any authority a taxpayer has provided for that role.

Note: Our systems only support one registered agent against a role. Where you are the registered agent for the client and another registered agent is listed on the role, you must provide details from the latest lodged activity statement or tax return or another type of ATO generated notice specific to the role.

You must refer to an ATO generated notice or lodged return that is no more than five years old and is relevant to the role. You must also provide one of the following relating to the client:
  • their TFN (if not already provided as an identifier)
  • their date of birth, if applicable
  • their address – business, postal or email.

Where another registered agent is listed on the account for a role, the notice you refer to must be more recent than any authority a taxpayer has given for that role.

You must also provide verbal assurance that you have a signed authority.

Note: Our systems only support one registered agent against a role. Where you are the registered agent for the taxpayer and another registered agent is now listed on the role, you must provide details from the latest lodged activity statement or tax return or another type of ATO generated notice specific to the role.

Proof of Identity for Registered Agents

The first step in the ATO resource is Proof of Identity for Registered Agents.

In order to avoid errors and help stamp-out tax fraud through identity crime, it is important BAS Agents take steps to check the true identity of individuals asking you to act on their behalf. The ATO have seen increasingly complex attempts by criminals to commit refund fraud by stealing the identities of taxpayers and posing as those taxpayers.

Carefully checking proof-of-identity documents and questioning discrepancies in information provided by people is an important first step to stop these attempts.

Verifying Individual Identities

A few simple questions can stave off a lot of trouble. What’s your name? There is perhaps no simpler a question in any interaction. But as a practitioner how do you know that the answer you are being is accurate. Do you know that your client is being honest? How can you ever tell that the person you are having commercial dealings with is who they claim to be?

You must verify your client’s identity, as failure to do so can result in you breaching ATO and general legislative provisions. The ATO recommends that you confirm the following with new clients whether online or in face-to-face meetings.

Identity crime can happen to anyone at any time. ICB strongly recommend you perform identity checks for:

  • All new clients before accepting them as clients.
  • Existing clients, in particular when personal information has been altered or information relating to tax affairs is inconsistent with information you already hold (and have previously verified) about their tax affairs.
  • All representatives of clients (whether they claim to represent new or existing clients).

For more information see ICB – Client Verification - Know Your Client

Resources

  • 23rd November 2021
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