What to do if you've fallen for a tax scam


As we head deep into the season for lodging your tax return, we're also 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 ATO.

Tax scams can take many forms and new ones emerge all the time. Among the latest, the fraudsters initiated a three-way telephone conversation between the scammer, the victim, and another scammer impersonating the victim's tax agent.

Typically, one scammer will call the client pretending to be from the ATO. The scammer 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).

how to avoid a tax scam

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 that the client has a debt to the ATO that needs to be paid immediately.

In one instance, a H&R Block client received such a call while actually in our office, meeting their tax consultant. Needless to say, the fraudulent nature of the call was obvious from the outset. Unfortunately, in another case, a client fell for the scam and paid over $2000 to the scammer in Google Play vouchers.

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 in the account. In reality, it's so that 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.

In reality, 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.

Meanwhile, older scams continue to proliferate.

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.

Fake phone calls 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 if you get a scam phone call

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 that 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 [email protected]

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

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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Mark Chapman is director of tax communications at H&R Block, Australia's largest firm of tax accountants, and is a regular contributor to Money. Mark is a Chartered Accountant, CPA and Chartered Tax Adviser and holds a Masters of Tax Law from the University of New South Wales. Previously, he was a tax adviser for over 20 years, specialising in individual and small business tax, in both the UK and Australia. As well as operating his own private practice, Mark spent seven years as a Senior Director with the Australian Taxation Office. He is the author of Life and Taxes: A Look at Life Through Tax.