TPB - Verify Your Client's Identity

There has been recent discussion about how to check the identity of a new client when you only interact with them remotely. The TPB is drafting a practice note that will address issues faced by tax practitioners when dealing with prospective clients.

It’s easy to take it for granted that someone you meet in person is honest, however you do need to check the identity of new clients regardless of whether you engage with them in person or online.

Under the TPB Code of Professional Conduct an agent must take reasonable care to ascertain a client’s state of affairs and to ensure tax laws are applied correctly. What constitutes ‘reasonable care’ is different according to the situation with your client. Relevant factors include the terms of engagement, the complexity of services being offered and the client’s circumstances and level of knowledge.

The TPB Code of Conduct does not specifically provide guidelines around verifying a person’s identity, however it is becoming increasingly important to know your client and perform an identity check in order to minimise the chance of identity fraud and cybercrime. This applies especially to new clients, but you are within your rights to perform an identity check for existing clients if you notice unusual changes or transactions.

It is the obligation of a registered tax or BAS agent to ascertain that a new client is a genuine taxpayer and that they are who they say they are.

Proof of Identity Checks

The ATO provides information for tax practitioners to verify an individual’s identity. Depending on the situation, the following documents can be used:
  • Photo identification such as passport, driver’s licence or government identity card.
  • Birth certificate or citizenship certificate.
  • Notice of assessment from the ATO, Medicare card or recent bank statement.
  • Tax file number
  • Residential address and contact details
Visit the ATO practice administration webpage for full details of Proof of identity checks for new clients, existing clients and online interactions with new clients.

TPB – Code of Professional Conduct Reasonable Care