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ATO tax scam warning: What to watch out for

The ATO will never demand payment of tax through a cold call.

Compilation image of money and ATO symbol to represent tax scam
Tax scams can take many forms and may not be immediately obvious. (Source: Getty) (Samantha Menzies)

It's time to lodge your tax return, but that also means we’re heading into peak season for the army of scammers looking to hoodwink individuals and small businesses into parting with their money, their identity or both by claiming to be from the Australian Taxation Office (ATO).

Also by Mark Chapman:

Tax scams can take many forms and new ones emerge frequently, while older scams also continue to proliferate. Here are the four most common tax scams.

Tax scam 1: 3-way phone conversation

In one of the latest, the fraudsters initiated a three-way telephone conversation between the scammer, the victim, and another scammer impersonating the victim’s tax agent.

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Typically, one scammer will call the client and pretend to be from the ATO. They will ask who the client’s tax agent is. If the client responds, a different scammer will call back later (having found the phone number for the agent) and the call will show up as coming from the tax agent’s number (with the scammer using the tax agent’s number to mask their real number). The fake tax agent will say the client has a debt owing to the ATO that needs to be paid immediately.

In one instance, an H&R Block client received one of these scam calls while with their tax consultant in our office. Thankfully, the fraudulent nature of the call was obvious from the outset but, unfortunately, there are other cases where clients have fallen for the scam and handed over $2,000 to the scammers.

Tax scam 2: ATO refund

Another common scam involves a text message supposedly from ‘ATO Refund’ offering a tax refund to the recipient. If the victim clicks on the link, they’ll be asked for their personal details, Tax File Number (TFN) and credit card number, including the three-digit security code on the back.

Supposedly, this is so the refund can be deposited into the account. In reality, it’s so the scammer can start stealing money from the credit card.

A slight variation on the same scheme involves the scammer asking for a small fee to be paid via the credit card in order to access the refund. Shortly after paying, much larger deductions will be charged to their card.

The ATO will never ask for personal information, including credit card details and TFN, by text or email. Nor will they ask you to pay money to access a refund.

Tax scam 3: Fake emails

Over the past few years, thousands of people and businesses have received fake emails purporting to be from the ATO, asking them to click on a link or attachment to access further details. That one click can lead to disaster, allowing the scammers to access your computer system and potentially hold you or your business to ransom.

Tax scam 4: Aggressive phone calls

Fake phone calls also continue to proliferate, with rude, aggressive callers claiming to be from the ATO threatening taxpayers with arrest and even jail if they fail to pay non-existent tax debts, often by unconventional means such as iTunes vouchers.

What to do about tax scams

The ATO will never demand payment of tax through a cold call. Nor will they send emails or texts that require you to open attachments before you can take further action. Neither the ATO nor any tax agent will ever demand that a tax debt be paid using unconventional payment methods such as:

  • itunes cards

  • Google Play cards

  • Retail gift cards (such as Coles or Woolworths)

For phone scams, you should:

  • Hang up immediately

  • Call the ATO’s scam-reporting line 1800 008 540

  • If a suspicious call comes through from somebody claiming to be from the ATO or your tax accountant, you should hang up and call the ATO or your accountant’s office direct to ensure the call was genuine.

For email scams:

  • Don’t click on links or open attachments. Often, these links will take you to a fake payment site, where you are required to input your credit card details, which are then harvested and used by the scammer. Sometimes, clicking the link downloads malware that enables the scammer to take control of your phone or computer and perpetuate the scam to other taxpayers.

  • Forward the email (unopened) to ReportEmailFraud@ato.gov.au

If you have any doubts about whether a caller or email is genuine or not, contact the ATO on 1800 008 540 to verify.

If you have been the victim of a scam

If you have provided a scammer with funds or provided personal details, phone the ATO on 1800 008 540 straight away because your personal details, including your TFN, may be compromised. You should also contact your bank as soon as possible if you have provided credit card details as part of the suspected scam.

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