ATO ID Verification Compliance: Are Your Checks Still Valid?

The Australian Taxation Office (ATO) and the Tax Practitioners Board (TPB) have recently reinforced their expectations for Client ID verification requirements, clarifying that many firms may not be meeting compliance standards.

A major misconception? Client-Agent Linking (CAL) does NOT replace identity verification. If your firm relies solely on CAL or a single Document Verification Service (DVS) check, you may be at risk of non-compliance.

In this post, we break down what’s changed, what firms must do, and how Seamlss is the only solution that fully automates the required multi-step ID checks to keep your firm compliant and efficient.

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ATO ID Verification Compliance: What Tax Agents Must Know

What’s Changed? Key Updates from the ATO & TPB

1. CAL Alone Is Not Enough – The ATO has confirmed that linking a client in the ATO portal does not satisfy the required proof of identity (POI) process. (ATO Client Verification Guidelines)
2. In-Person ID Checks Are Sufficient – If an individual is verified in person or via a live video call with an original photographic ID (e.g., driver’s licence, passport), no further verification is required.
3. For Remote Clients, Two Separate Identity Checks Are Required – If you are not verifying a client in person, you must use a combination of verification methods. (TPB Practice Note TPB(PN) 5/2022)
4. DVS Must Be Combined with Another Source – If using DVS, firms must also verify another independent source such as ATO-held data.
5. Firms Should Not Store ID Documents Indefinitely – Best practice is to delete ID documents after verification to maintain security and privacy compliance. Seamlss automatically deletes ID documents after 7 days, ensuring compliance. (ATO Client Verification FAQs)

These clarifications mean that if your firm is verifying clients remotely but only using one method, you are likely not compliant.

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How to Ensure Compliance: The Two Approved Processes

Option 1: The Manual Process (For Firms Not Using Seamlss)

If handling ID checks manually, firms must ensure they are following one of the approved verification methods set out by the ATO (ATO Client Verification Guidelines).

1. If the Client is Verified In-Person or Via Video Call:
   • A Visual ID Check (e.g., driver’s licence, passport, or government-issued ID viewed in real-time) is sufficient.
   • No additional verification is required if the ID is original and photographic.
2. If the Client is Verified Remotely (Not Seen in Real-Time):
   • Two separate verification methods are required, such as:
     • DVS Check + ATO Data Verification
     • Visual ID Check + ATO Data Verification
     • Visual ID Check + DVS Check
3. Maintain Secure Records & Delete Sensitive Data
   • Firms should not store ID documents indefinitely.
   • The ATO recommends keeping audit logs but deleting sensitive files within a short period.

🚨 Note: Checking IDs and logging verification is a suitable approach for many firms and bookkeepers. This can be recorded manually or using tools like Seamlss or XPM to track and confirm compliance. Firms can follow a step-by-step guide on Seamlss’ Client Verification Process to streamline compliance.

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Option 2: The Seamlss Process (Full Compliance, Zero Hassle)

Seamlss is the only system built with these updated ATO/TPB rules in mind, making compliance effortless. Here’s how:

1. Step 1: Clients Complete the Full Onboarding Process in One Place
   • Clients provide all required details, including ID verification, financial data collection, and engagement signing, in a single workflow.
2. Step 2: Secure and Automated Verification
   • Seamlss collects a Visual ID Check and ATO Source Document in one step.
   • Option to use DVS via Stripe Identity, which we strongly recommend to improve verification security and compliance.
   • If anything appears suspicious, firms can request additional source documents securely to further verify the client’s identity.
3. Step 3: Seamlss Confirms Compliance & Deletes ID Docs Automatically
   • Seamlss verifies the required two-source rule automatically for remote clients.
   • ID documents are deleted after 7 days, ensuring security.
   • Seamlss also allows firms to request more documents when engaging representatives acting on behalf of another person, ensuring all verification requirements are met.

Benefits of using Seamlss

• Fully ATO & TPB compliant
• No manual checking or back-and-forth emails
• Audit logs automatically maintained
• Secure storage & automatic deletion
• Ability to request more documents securely when needed
• DVS via Stripe Identity recommended for better security

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Key Takeaways for Firms

✔ Client-Agent Linking (CAL) is NOT an ID verification method.

✔ In-person or live video verification of a photo ID is sufficient.

✔ For remote verification, firms must verify two separate ID sources. ✔ DVS alone does not meet ATO requirements—an additional check is needed.

✔ Seamlss allows firms to onboard clients in one place—ID checks, data collection, and engagement signing.

✔ Firms should not store ID documents long-term—Seamlss deletes them after 7 days.

✔ Seamlss allows firms to request additional documents when something seems off or when verifying representatives.

✔ Checking ID and logging verification is a valid option for some firms, which can be recorded using Seamlss or XPM.

✔ Using DVS via Stripe Identity is recommended for secure and efficient verification.

Stay Ahead of Compliance Risks

With the ATO and TPB reinforcing stricter ID verification rules, firms can’t afford to get this wrong. Whether you choose to manually verify ID checks or use Seamlss to streamline compliance, the key is to ensure you are meeting the two-source requirement for remote clients.

Want to see how Seamlss can simplify your compliance process?

Book a Demo Today and let us help your firm stay compliant, efficient, and secure.