the top six tax scams and how to avoid them

The top six scams to be aware of this end of financial year and how to avoid them

By Jacqueline Jayne June 24, 2022 3:31 am

As if business owners didn’t have enough to worry about at tax time. The ATO has warned there are an increasing number of scams targeting individuals and business owners and if you want to avoid them you need to be in the know, says Jacqueline Jayne, Security Awareness Advocate at KnowBe4.

The top six scams you need to know

SCAM: Fake TFN/ABN applications

These scams are advertised to unsuspecting people via social platforms such as Facebook, Twitter and Instagram stating that you can get some help with obtaining a TFN or ABN for a fee. If you engage with the advertisements, you are taken to fraudulent websites where your money and personal information are stolen.

It’s important to know that applying for a Tax File Number (TFN) or Australian Business Number (ABN) is FREE and you can do that here and here.

If you are going through a tax agent to get your TFN OR ABN, check that they are registered here and remember that they may charge a fee for their services to apply on your behalf.

SCAM: Tax evasion suspected, pay with cryptocurrency

Scammers are opportunistic so it makes sense that there would be a scam involving tax and cryptocurrency. Here we see smishing (malicious SMS) pretending to be from the ATO with a message stating that you are a suspect in cryptocurrency tax evasion and asking you to click here to connect to your wallet to sort it out. Please do not click on the link. The ATO will never send you a SMS or email with a link.

SCAM: Fake tax debt

Pretending to be from the ATO, this contact can come from a phone call or SMS where you are informed that you have a tax debt and that if you don’t pay it straight away you will be arrested. The scammers will demand payment via pre-paid gift cards or credit cards or even cryptocurrency (e.g., Bitcoin) and will be very persistent for you to pay them.

If you receive this call hang up. It’s also a big red flag if someone asks you to pay in this way. If you have a legitimate outstanding tax debt, the ATO may use phone, email or SMS to contact you. They will never demand payment using unusual methods, threaten arrest or use prerecorded messages.

SCAM: Fake request to update your financial information

Shifting gears to email communication for this one. This email scam impersonates the ATO with a message stating that you have a tax refund available, and it includes a dollar amount. To claim the refund, all you need to do is open and fill out an attached form.

Do not reply to this email or open the attachment. If you are expecting a tax refund, contact the ATO directly on 1800 008 540 or contact your accountant.

SCAM: Asking you to update your myGov Details

The ATO have previously received reports of email and SMS scams that asks people to update their myGov or myGovID details and we anticipate seeing this scam again this year. Scammers pretend to be from the ‘myGov customer care team’ and send emails telling people they need to verify their identity by clicking on a link.

If you open the link, you will be taken to a fake myGov website where you are asked to sign in with your myGov details.

Remember, myGov will never send you a link in an email or SMS. They will only send you links within your myGov inbox within the myGov app. If you receive an email or SMS asking you to log in via the link provided, don’t click the link. Always log in directly form the MyGov website found here .

SCAM: Sending alerts claiming that you have a suspended Tax File Number (TFN)

For the last few years at tax time, the ATO receives reports of calls where you hear an automated voice message claiming that your TFN (tax file number) has been suspended and that there is a legal case against your name. Then you are asked to press ‘1’ or you will be referred to the court and arrested.

This is a scam.

If you do press ‘1’ you will be put through to a scammer who will tell you that your TFN has been suspended due to money laundering or fraudulent activity. Then, just to leverage the fear factor, you are asked to provide the last four digits of your TFN, address, date of birth, name of your bank account and the approximate amount of money in the account(s).

If you are lucky, the scammer may transfer you to the fake police. They will tell you that a case has indeed been filed against you and you will be arrested if you don’t pay.

If you receive this call hang up.

The ATO will never send unsolicited pre-recorded messages to your phone or threaten you with immediate arrest.

Advice for business owners

It is up to you to communicate to your people exactly what to expect from your HR or Payroll Department at tax time.
Provide clear details as to what they are to receive and warn them that there is a very high chance cybercriminals will be targeting them at tax time.
Step your people through relevant, engaging, and ongoing security awareness training and provide an opportunity for them to test out their knowledge with simulated phishing and other social engineering tests.
Share the tips below to your employees, customers, vendors and suppliers.

Advice for Employees (and everyone else)

Ask your HR Department or Payroll when and how you will receive your Group Certificate.
Only deal with the ATO via an official channel such as the MyGov website https://my.gov.au/ or https://www.ato.gov.au
The ATO will never request personal details like bank account details via email, SMS or voice mail.
The ATO will never ask you to pay for anything with gift cards, credit cards or cryptocurrency (like Bitcoin).

Advice for Tax Professionals

Cybercriminals are actively looking to gain unlawful access to your client data as it is of great value to them. They will even pose as a client sending you an email with a malicious attachment in the hope you open it and grant them access. Once inside, they can access your entire inbox and then all your client’s data. You need to be on the lookout for all suspicious emails and be extra vigilant at tax time.

Report any suspicious activity to the ATO

Call 1800 008 540

If you receive a suspicious ATO related email