Identifying clients remotely

Tax Topics
1

Just wanted to see how others are doing this. People are being referred to me that I’ve never met and we are going to be dealing remotely. What practice do you use for identifying clients? I ask new clients to provide copy of last year return or NOA…is this good enough? Or should I be doing a video chat and comparing face to photo ID??
Thanks

2

I never check id’s and most of my clients are remote. Many of my clients I have only dealt with over the phone or by email and never met or seen them face to face. I do generally insist on copies of prior year tax returns just from a completeness point of view. That said most of my clients have been my clients for 10+ years at this point. If I don’t get a good vibe on the phone with new clients I don’t take them on as clients.

3

I dealt with some legal issues for a sale with a lawyer who did not know me (although their partner did…) and we had a Teams session during which I held my ID to the camera and she grabbed a screen cap of it.

As well, when we dealt with an estate Probate during COVID a different lawyer watched me execute the documents in real time.

I don’t really take new clients other than kids of existing clients or people I know through other circumstances. NOT taking ID would not be an option for me, as if I file a return for someone I shouldn’t have…well…not a good thing!

1 Like
4

Ok great, thanks so much for sharing that Laurie. I haven’t up til now but they’re usually referred by a professional or someone I know

5

Here in NS, lawyers are required by regulation of the Barristers Society to document a client’s identity. The first thing in their file (paper or pdf) should be a new client ID form and a copy of a photo ID, usually a drivers license. If you are the accountant reviewing their trust account, and your file sample includes one without a client ID, your report to the Barristers Society will generate a visit from their staff auditor. So, for lawyers, it’s a serious thing. Not so much for accountants…yet.

1 Like
6

I don’t believe “seeing a face” is proof that someone is who they say they are. If a con artist is going so far as to impersonate someone, they will probably have fake IDs, and other things in place to fool people. In which case they could meet you in person and you’d still not know.

Like @laurie , I have several clients whom I’ve never met in person - some are remote, but some live right here in the same city.

  1. When I take on a new client, I always demand to talk to them on the phone (and for existing clients, when their children turn 16 and must sign their own taxes, I require a phone call with the child).
  2. I always get an AuthRep signed and filed. Then I always check them out via RAC - if something looks fishy (i.e. the person on the phone sounds like a 20 year old, but CRA shows them to be 80) I’d be very skeptical.
  3. I get Engagement letters signed every year. Not that this proves their identity, but it does limit my firm’s exposure.
  4. I demand supporting documents for any significant tax deductions (i.e. loss on capital property, moving expenses, etc). The more documentation they can provide, the more likely they are who they say they are.
  5. If there is tax payable, and they actually pay it, they are likely who they say they are - con artists are looking to GET money, not PAY it.
  6. If they come back again every year (to get their taxes done), they are likely who they say they are.

Etc

3 Likes
7

I also get back up for all income and deduction amounts just because I keep them for my files to make sure that when the CRA invariably asks to see them at some point I have them and can just send them off. But yes - if they have the back up they probably are who they say they are.

1 Like
8

I do pretty much the same as @nezzer.
Additionally, I ask them to send a pic or screen grab of their ID and of them holding their photo ID by their face.
As an additional safety measure, I refuse to change direct deposit information for the first year for a new client I’ve met this way . They almost always understand when I tell them it’s for their security. I do inform them of the other ways they can do it if they are insistent in changing it.

1 Like
9

Wow, some very great points here. Thank you so much everyone for taking the time to respond. I do think it’s important to cover one’s butt…and generally, I’m a “by the book” kind of person. I think I like the idea of a pic holding photo ID…and, yes, on the banking change…didn’t think of that.
Happy tax season everyone :slightly_smiling_face: