Tax Scams – How to spot them and how to protect yourself

According to the ATO, tax scams delivered via phone this year far outnumber those sent through any other delivery method, including social media and email. In July 2021 alone, there were 456 incidents reported to the ATO where victims were scammed by people impersonating the ATO.

The scammers try to trick people into making payments or sharing their personal information by pretending to be calling from the ATO or other agencies like the Australian Federal Police. The caller claims that you owe a debt or that your Tax File Number (TFN) has been suspended due to money laundering or other illegal activity.

While eliminating the threat may be difficult, there are some simple ways you can avoid becoming the next victim, starting with knowing how to spot a tax scam.

How to spot a tax scam

Scammers often use psychological triggers to get an automatic response from you without you realising it. For example, they may try to make you panic and stop you from thinking clearly. Some of the common tactics that have been reported to the ATO include:

• Threats of immediate arrest. The ATO will not threaten you with immediate arrest.
• Demanding you stay on the phone until you pay. The ATO will never demand that you stay on the line until you clear your debt.
• Using technology to show a genuine ATO or Australian phone number in the caller ID or call log. Calls from the ATO do NOT show a phone number; they always show as No Caller ID.
• Claims that your TFN has been suspended or cancelled. The ATO does not cancel TFNs.
• Requesting payment by vouchers or gift cards, overseas wire transfer or cardless ATMs. If you owe the ATO money, they will want it paid in Australian currency via the methods outlined on their website.
• Asking for personal information, including bank details, by email or SMS to receive a refund. Do not give out your TFN, date of birth or bank details unless you trust the person you are dealing with, and they genuinely need the information like an employer or your accountant.
• Asking you to click on a link in an email or SMS to access an online service or download documents. Scammers do this to steal your personal information or download malware onto your device.
• Tell you that you cannot speak to your tax agent or accountant. The ATO will never prevent you from speaking with your trusted advisor. You should always discuss any tax issues with your accountant.

What to do if you think you may have been scammed

If you think you have been the victim of a scam, there are some important things you should do as soon as possible:

• Call the ATO and tell them what happened
• Report it to the police
• Contact your bank if you provided card or account details to a scammer
• Contact the bank you made the payment to and lodge a fraud report

If you think you have received a scam phone call, SMS or email and did not pay or provide sensitive information, you should still report it to the ATO.

Protect yourself

Keep your personal information protected. You should only share your personal information with people you trust who have a genuine and legitimate need for it. Never, ever share personal information via social media, even if you are sharing it with someone you trust.

To commit identity crime, perpetrators only need some basic details like your name, date of birth, address, myGov details or tax file number (TFN). They can use these details to gain access to your bank account, superannuation, apply for government benefits, sell your identity to organised crime groups or even sell your house.

Once your identity has been compromised, it can take a long time to fix. During this time, you might find it difficult to get a job, apply for a loan, buy or rent a house or apply for government benefits.

Think your personal information is secure? Check out the ATO’s tips to keep your personal information safe.

The best way to protect yourself from scams is through education and awareness. The ATO regularly publishes scam alerts on their website, and the ACCC’s Scamwatch website provides information about how to recognise, avoid and report scams.