How to spot and avoid tax time scams

Tax season is fast approaching. Though it can be a headache lodging your tax return, there’s a bigger beast you should keep an eye out for – scammers. They’re quick to capitalise on the cost of living crisis and will do all in their power to swindle you well into the new financial year. 

New research commissioned by the Commonwealth Bank found that almost one in three Aussies could not identify a tax-related phishing scam. While 9 out of 10 were confident they knew how to spot a fake SMS or email, only 69 per cent could correctly identify all tax-related phishing scams. The key to remaining safe from scammers during tax time is staying vigilant. Know how to spot the signs of a tax scam, and take action quickly to safeguard your personal information. 

ANZ’s Senior Manager for customer protection, Jess Bottega, urges customers to secure their finances and remain vigilant against scammers. 

“As people turn their attention to filing their tax returns, we commonly see scammers impersonating tax officials with the intent of gaining access to bank details, tax file numbers or other personal information.

“According to the ATO, emails directing people to fake myGov websites were the most reported scam. In the six months to March 2024, approximately 75 per cent of all email scams reported to the ATO linked to a fake myGov sign-in page,” she said.

ATO (Australian Taxation Office) and MyGov impersonation scams, payment redirection scams, and fake charity scams are common towards the end of the financial year.

These scams involve phone calls, texts and emails from scammers who claim they’re with the ATO or MyGov. They might ask for payment to urgently settle a tax debt or say they need to amend your personal information to process your tax refund. In some cases, they might even threaten arrest unless the fake tax debt is paid. 

Other impersonation scams involve the scammer pretending to be a tax agent, offering ‘advice’ at a fee. As you’d guess, they’ll instead steal your money and personal information.

Also known as BEC, or business email compromise scams, payment redirection scams involve a scammer impersonating a business, client, or one of its employees. They’ll request an upcoming payment to be redirected to a fraudulent account, or intercept legitimate invoices and amend the bank details so the business is none the wiser. Sometimes, the email will be sent from a legitimate address that the criminal or scammer has taken control of.  

In 2021, Australian businesses lost $227 million to payment redirection scams, a 77% increase from the year prior. 

There are plenty of charities deserving of your hard-earned cash. However, it's important to be sure the person you’re talking to is genuinely working with the charity and not a scammer. Genuine charity representatives won’t make your donation seem like an urgent matter of life or death. If you decline, a scammer will likely push hard for you to donate at that very moment, instead of giving you time to think about your decision.

Additionally, if the person on the other end can’t tell you exactly what your donation will be used for or if they ask you to pay through wire transfer, gift cards, or cryptocurrency, there’s a high chance you’re involved in a fake charity scam.

Signs you could be a victim of a tax scam:

• You feel rushed into giving away money or making a payment to someone over the phone.
• The message you received contains spelling mistakes, grammatical errors, or a tone of voice that doesn't resemble the government body it's supposed to be from 
• The email address is an array of random numbers or letters and doesn't look like it's from a legitimate sender. 
• The sender is requesting sensitive information and/or is asking you to click on a link that could lead to an unsafe website.

If a scammer gets ahold of your personal information, they can steal your identity. Once they gain access to your accounts, they can impersonate you, and fraudulently submit refund claims to the ATO using your stolen Tax File Number (TFN).  

To keep yourself safe, make sure you:

• Safeguard personal information like passwords and TFNs.
• Use strong passwords on all of your accounts (using a password manager can help keep your passwords safe and secure).
• Enable multi-factor authentication for email, bank, and social media accounts.
• Report suspected compromises to the ATO.
• Do not accept help from unregistered tax agents or preparers. To ensure the person you’re talking to is genuinely a tax agent, look for their name on the Tax Practitioners Board.
• Do not respond to messages from scammers.
• Don't click on links in emails or texts. 
• Visit the official website and call the customer service line to verify the legitimacy of the message yourself, don’t use the contact details listed in the message.

Protecting yourself against scammers, especially during tax time, doesn't have to be stressful. Keep your passwords and personal information under digital lock and key, and always be wary of sketchy emails, texts, or phone calls that purport to come from the ATO or MyGov. Additionally, be sure to report the scam to Scamwatch and the ATO.