Home » Beware of Tax Scams: Key Warning Signs and How to Protect Yourself

Tax scams are increasingly sophisticated and prevalent, posing significant risks to individuals and businesses alike. As your trusted advisors, we want to ensure you are well-informed about the common tax scams and how to protect yourself. Awareness and vigilance are crucial in safeguarding your financial information and assets.

1. Phishing Scams

Phishing scams involve fraudulent emails, phone calls, or text messages that appear to be from legitimate sources like the Australian Taxation Office (ATO) or other government agencies. These scams aim to trick you into providing personal information, such as your tax file number (TFN), bank account details, or passwords.

How to Protect Yourself:

  • Always verify the sender’s email address and the authenticity of the communication.
  • Do not click on links or download attachments from unknown sources.
  • Contact the organisation directly using official contact details to confirm the legitimacy of the communication.

2. Phone Scams

Scammers may call you, pretending to be from the ATO or other government bodies, claiming that you owe money or are entitled to a refund. They may use aggressive tactics to demand immediate payment, often asking for payment via unusual methods such as gift cards or cryptocurrency.

How to Protect Yourself:

  • The ATO will never threaten you with immediate arrest or demand payment through unusual methods.
  • Hang up and contact the ATO directly using the official phone number to verify the call.
  • Do not provide personal or financial information over the phone unless you are certain of the caller’s identity.

3. Tax Return Scams

Fraudsters may offer to help you prepare and file your tax return, promising large refunds. They may charge exorbitant fees or steal your personal information to commit identity theft.

How to Protect Yourself:

  • Use registered tax agents or accountants to prepare and lodge your tax return.
  • Verify the credentials of any tax professional you work with.
  • Be wary of promises of unusually large refunds or requests for upfront payments.

4. Identity Theft

Scammers can steal your personal information to commit identity theft, using your details to file false tax returns, open bank accounts, or take out loans in your name.

How to Protect Yourself:

  • Regularly check your credit report for any suspicious activity.
  • Secure your personal information, including your TFN and banking details.
  • Use strong, unique passwords for your online accounts and enable two-factor authentication where possible.

5. Fake Websites and Apps

Scammers create fake websites and mobile apps that mimic legitimate tax preparation services. These sites and apps can steal your personal and financial information when you enter it.

How to Protect Yourself:

  • Ensure you are using the official website or app of the tax preparation service.
  • Look for secure website indicators, such as “https” and a padlock icon in the address bar.
  • Avoid downloading apps from unofficial sources or clicking on links from unsolicited emails or messages.

6. Employment and Investment Scams

Scammers may offer fake employment opportunities or investment schemes that require you to provide personal information or make upfront payments. These scams can result in financial loss and identity theft.

How to Protect Yourself:

  • Research any employment or investment opportunity thoroughly before providing personal information or money.
  • Be cautious of offers that seem too good to be true or require immediate action.
  • Consult with a financial advisor or tax professional before making significant financial decisions.

Stay Vigilant and Informed

Scammers are constantly evolving their tactics, making it essential to stay informed about the latest schemes. Here are some additional tips to protect yourself from tax scams:

  • Educate Yourself: Stay updated on the latest scams and fraud alerts by regularly visiting the ATO website and other trusted sources.
  • Report Scams: If you suspect a scam, report it to the ATO and the Australian Competition and Consumer Commission (ACCC).
  • Seek Professional Advice: Consult with your tax advisor or accountant if you are unsure about any tax-related communication or transaction.

By staying vigilant and informed, you can protect yourself and your business from tax scams. Protecting your financial well-being is our priority. Stay safe and secure by being aware of the risks and taking proactive steps to safeguard your information.

Disclaimer: The information contained in this newsletter is provided for informational purposes only and should not be construed as legal advice on any subject matter. Readers should not act or refrain from acting on the basis of any content included in this newsletter without seeking appropriate legal or other professional advice. The content of this newsletter contains general information and may not reflect current legal developments, verdicts, or settlements. We expressly disclaim all liability in respect to actions taken or not taken based on any or all the contents of this newsletter.