Tax scams and rip-offs

What to look for | Identity theft

An email was doing the rounds recently, seemingly from the Tax Office as it carried the logo and had a Tax Office email address as the sender. The 'lucky' recipient was informed that final calculations showed that they were in fact found to be owed a tax refund. Follow the link, it said, fill out the form, and hey presto money would be deposited into your account. The web page that the link took the reader to even looked nearly exactly like an official Tax Office web page.

Of course it was all a scam, and at the time the Tax Office was diligent in sending out a warning about the fake email and recommending that people who got it quickly hit the delete button. It also added that it could be safer to make a habit of typing internet addresses directly in to your browser yourself rather than following embedded links.

Around Christmas and tax time in particular, it will pay to be extra cautious, not just with emails but with any tax-related deals or schemes. And a healthy measure of scepticism could be in order – as surprising as it may seem, people still fall for what may seem to most of us to be an obvious swindle. For example, recent police reports show that Australians still send about $3 million a month to 'Nigeria'.

What to look for
So if the clumsily executed scams are raking it in, how much more dangerous could other increasingly sophisticated tax schemes and scams be? The Tax Office for its part says that while it may occasionally send an SMS or email to businesses or tax agents with due dates or promoting a new service, it will never ask for personal or financial information in this way, including asking about tax file numbers or business numbers.

If a real amendment to your tax return occurs, the Tax Office will get in contact via snail mail and will send an amended notice of assessment on paper to your postal address – never by email. The Tax Office website has a page that advises everyone about its current SMS or email activity, so you can check the legitimacy of any message you receive there (here's the link).

It also has examples of social media scams, which you can view here, and has an This e-mail address is being protected from spambots. You need JavaScript enabled to view it with which to report scamming emails.

Tax time is also the peak period when dodgy investments can be promoted as offering huge returns for investors, or generous tax breaks. No matter how tempting any claimed tax benefits may be, the fact is that most of the time getting that tax break back as cash-in-hand will take time. An investment needs input upfront, so by the time the alleged tax benefit manifests, the investment scheme and its promoter could be long gone.

Always get independent advice to make sure an investment is legitimate. You could be up for not just your hard-earned, but a tax bill to cover as well. Just be aware that the laws relating to tax avoidance and tax evasion can apply to you even if you were an 'innocent victim' tricked by a smooth-talking promoter of one of these dodgy investments (read about it here).

Identity theft
One of the fastest growing areas of criminal activity involves identity theft. Stolen or assumed identities are used every day to commit crimes such as fraud or to access someone else's money. The rapid growth of online services and products hasn't helped. In fact developing technologies can be at the heart of a lot of today's criminal activity, as evidenced by ATM skimming by overseas gangs that stole millions of Australian dollars.

The more organised and widespread nature of identity crime has seen Australia's tax file number system targeted. Scams that the Tax Office has monitored have shown an increasing interest in getting to people's TFNs, and it urges everyone to keep this most important piece of identification secure.

The Tax Office advises not storing your TFN in your wallet or purse, don't share it with friends, and never provide it on the internet when applying for a job. Someone with access to your identity can even take out loans under your name, leaving you liable.

Only certain people and organisations can ask for your TFN, including the Tax Office and other government agencies, or your super fund, your employer, or your tax agent. An Australian government initiative called Scamwatch could also help.

Last reviewed 9/08/2012

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