Compliance
Compliance Shift: Mandating Identification for Agent Lodgments in Tax Time 2026
ATO to require agents to include client-verified identity (FID) when lodging refunds, part of broader cheque-elimination efforts.
By NomadicTax Research Team • 5-8 min read • March 21, 2026
## What’s Changing and Why
From **Tax Time 2026**, the Australian Taxation Office (ATO) plans to **mandatorily require client verified identity (FID)** for all agent lodgments involving Individual Income Tax Returns (IITR) and Fringe Benefits Tax (FBT) forms submitted via agents. This move is part of the ATO’s effort to reduce fraud, cut reliance on cheques, and improve the integrity of its digital lodgment system. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/sites/default/files/2025-07/PLS_working_group_Key_Outcomes_1_July_2025.pdf?utm_source=openai))
Cheque-based refunds are seen as higher-risk and slower. Eliminating them aligns with the broader global push towards digital identity verification. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/sites/default/files/2025-07/PLS_working_group_Key_Outcomes_1_July_2025.pdf?utm_source=openai))
## Who This Affects
- **Registered tax agents** lodging returns with refunds expected.
- **Clients** of tax agents will need to have a verified identity before refunds are processed via agent lodgments.
- **Software Developers and DSPs** will need to ensure their systems support collecting and transmitting FID info. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/sites/default/files/2025-07/PLS_working_group_Key_Outcomes_1_July_2025.pdf?utm_source=openai))
## What You Need to Do to Stay Compliant
- **Agents** should:
* Ensure your clients complete identification verification steps before lodgment deadlines.
* Update internal processes to capture FID where needed.
* Work with DSPs or software providers to integrate FID capture into their UX.
- **Clients** should:
* Register for a myGov/MyID identity verification if not already done.
* Be prepared to supply identification info to your agent early.
## Practical Example
- **Agent Anna** normally lodges refunds for dozens of clients each tax season. In 2026, if she lodges for those without verified identity, the refunds may be delayed or issued via cheque (if permitted), or possibly rejected for digital lodge. So Anna must build FID into her onboarding.
- **Client John** gets a big refund. If John hasn’t verified identity, he may need to go through MyID or ATO channels in advance so the refund process through his agent isn’t delayed.
## Key Takeaways
- **Start early**: the rule starts July 1, 2026 — build time into your workflow now.
- **DSPs need roadmap visibility** so their platforms are ready.
- **Communications** between agents, staff, and clients about why you’re asking for identity will help prevent confusion and delays.
By embedding identity verification into agent lodgments, the ATO aims to speed up refunds, reduce fraud risk, and modernize the tax system.