As many of you would have read, the ATO has identified and is taking strong action, through Operation Protego, to respond to significant GST fraud. The fraud involves participants inventing fake businesses to claim false GST refunds they are not entitled to. The scheme was largely promoted online, through social media platforms, such as TikTok. The social media posts claimed to help people access a ‘loan’ from the ATO or receive other financial government support, such as a disaster payment. In many cases, people were taken advantage of by criminals, who convinced them to commit fraud, and then took a cut of the fraudulent payments.

We know that the vast majority of tax practitioners act ethically and lawfully. Our role is to support professional standards, public protection and community confidence in the system. That’s why we encourage your early engagement with us and the ATO whenever you become aware of any fraud.

You may become aware that a client has been misled into lodging false claims, including GST refunds. Sometimes tax practitioners identify others who are designing or promoting schemes or frauds. Again, your engagement with us and ATO supports your clients, continues your high standards of professionalism, and ensures your legal compliance.  

Any tax practitioner found to be engaging in, promoting or applying this scheme may risk their registration and could face sanctions being applied. Ultimately it is your responsibility to exercise appropriate due diligence and ensure you follow your obligations under the Code of Professional Conduct in the Tax Agent Services Act 2009 (TASA), specifically in this situation:

• Code item 1 – you must act honestly and with integrity.

• Code item 4 – you must act lawfully in the best interests of your client.

• Code item 7 – you must ensure that a tax agent service that you provide, or that is provided on your behalf, is provided competently.

• Code item 9 – you must take reasonable care in ascertaining a client’s state of affairs, to the extent that ascertaining the state of those affairs is relevant to a statement you are making or a thing you are doing on behalf of a client.

• Code item 10 – you must take reasonable care to ensure that taxation laws are applied correctly to the circumstances in relation to which you are providing advice to a client.

• Code item 11 – you must not knowingly obstruct the proper administration of the taxation laws.

It is also important to understand that if a registered tax practitioner knowingly or recklessly makes a false, incorrect or misleading statement to the Commissioner of Taxation they may be in breach of a civil penalty provision in the TASA. This could attract fines of up to $68,750 for individuals and $343,750 for body corporate for each breach and may also result in a criminal offence under the Taxation Administration Act 1953.

Cooperation and transparent disclosure to us and the ATO, with your client's consent, will:

• support easier resolution,

• address risks of penalties, interest and audit, and

• properly discharge your obligations.

By acting lawfully, with integrity and in the best interests of your clients, you’ll have the opportunity to address and explain any false or fraudulent claims, and the potential civil or criminal penalties.

You can contact us via our online form and the ATO can be contacted online or by calling 1800 060 062. (Remember information can be provided anonymously).

Integrity of the tax system is enhanced with your information about those who may be promoting schemes or frauds, including unregistered preparers. This information can generally be shared with us and ATO without compromising client confidentiality. However, if you make a tip off as a tax whistleblower, you may be eligible for immunity under the ATO’s whistleblower laws. The whistleblower protections recognise the importance of disclosure of suspected fraud, by concerned citizens and tax practitioners.

For tax practitioners who are members of a recognised professional association, disclosure of suspected fraud/promoters will align with your association’s disclosure requirements. Refer to the recent public statement from CA ANZ and APES 220 – Taxation Services which set the standards for members in the provision of quality and ethical taxation services.

Doing the right thing by your clients, with early disclosure, supports your ongoing registration and potential impacts on your professional indemnity insurance coverage. Remember, under the TASA you must notify us of any event affecting your continued registration, including matters affecting directors or partners of tax practitioner companies and partnerships. 

Tax frauds, including the Protego GST scam, harm our community and the system. We are grateful for the cooperation and transparency of the majority of tax practitioners upholding strong legal and ethical standards.