Tax time in Australia: How you can protect yourself from tax fraud
As the end of the financial year approaches, many Australians will be getting their accounts in order to file a tax return.
But a sharp increase in tax-related fraud has seen the Australian Taxation Office (ATO) release a list of potential scams taxpayers may come across – while major banks are strengthening their fraud detection teams in a bid to mitigate potential online theft.
According to ATO scam data, it received around 20,000 reports of tax scams in 2022-23 alone – averaging 1,667 reports per month.
And accountants say cost of living pressures and interest rate hikes are adding to the rise in tax scams, with fraudsters well aware that many Australians are looking for a quick cash injection.
Crime Stoppers Chief Executive Stella Smith said it was important for all Victorians to remain vigilant while preparing their tax returns.
“Crime Stoppers Victoria continues to educate the public about staying vigilant and safe online”, she said. "We know that online scams are getting more and more sophisticated, and with tax time just around the corner, educating yourself so you can avoid being scammed has never been more important.”
BankVic Head of Financial Crime, Warren Kamara, said it was important to take your time and double-check with friends and family if you feel something doesn’t feel quite right.
"It's all about taking your time - scams are designed to create panic and pressure you into making an immediate decision without proper research or consideration,” he said. “Remember to check with a friend or family member before you click if something doesn't seem right."
In January this year, the ATO sent an alert out saying it would never send people an email or SMS with a link to log in to its online services.
It said while it may use email or SMS to ask people to contact the taxation office, it would never send an unsolicited message asking people to provide personal details through those channels.
Despite this, the increase in tax scams and how they operate continues to get more sophisticated.
Here are some of the scams you may come across as the end of the financial year approaches – and how you can protect yourself.
ATO impersonation scams:
A common tactic being used by tax scammers is to contact taxpayers through e-mail, phone, text message, or even social media and claim to represent the ATO.
The scammer will then try to extract personal information from the victim or demand immediate payment of a false tax debt – even threatening jail if the payment isn’t made immediately.
To keep yourself safe from this scam, you need to know the ATO will never ask for personal details or threaten to arrest you.
If this happens to you, it’s a sure-fire way of knowing someone is trying to scam you and the best solution is to simply hang up.
Fake ATO social media accounts:
As social media usage continues to surge in popularity, scammers are increasingly creating fake ATO accounts where they pose as officials before asking unsuspecting users to share their personal information – including their bank account or credit card details.
To protect yourself from this one is fairly easy – the ATO will never ask for such personal information on social media.
If you’re still unsure, you can always check if the social media account has a verified badge – if it’s not verified, it’s not the ATO.
Tax refund SMS scams:
We’ve probably all received them – a text message with a link saying you’ve missed a delivery or even won something.
But as tax time approaches, it’s important to keep an eye out for text messages which promise tax refunds.
These texts will usually include a link and ask you to provide your personal information and credit card details.
The best way to avoid this one is to remember, the ATO will never send an SMS or text message which includes a link to login and requests your personal details.
Email phishing scams:
Email phishing scams are probably one of the most common methods used by scammers.
The scam comes via a false email and appears to be from the ATO, addressing topics such as tax lodgment or refunds.
These e-mails generally contain a link that sends receivers to fake login pages which then ask for your personal information or login credentials.
To protect yourself from this one is also fairly simple – the ATO will never ask for such details in an unsolicited e-mail, particularly one with links where you need to log in or provide information.
Overall, to protect yourself from tax scams you should remain vigilant and follow some basic guidelines.
This includes being cautious of unsolicited communications, especially those requesting personal information or immediate payment.
Scammers continue to develop sophisticated methods to deceive and defraud taxpayers and by staying informed and remaining vigilant, you can protect yourself from falling victim to these scams.
Remember – the ATO will never demand immediate payment, threaten arrest, or request personal information via unsolicited communications.
For more information on ATO scams click here.
To report a scam visit scamwatch.gov.au.
This article is presented to all Victorians by Crime Stoppers in partnership with BankVic. For more information, podcasts and articles as part of our continued series of content supported by BankVic, please click here.
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