Accountants are warning Australians to be on alert for tax scams as they work through their end of year tax returns this month.

The ACCC reported Australians lost $851 million to scammers capitalising on the pandemic over the last year - a record - and 2020 saw a growing number of automated ATO impersonation calls.

In February 2021, the ATO said it had already received 638 reports of ‘suspension of tax file number’ scam, with7 victims alone paying out nearly $118,000.

2020 was sadly the year of the scam - and Tax Time 2021 will again see these heartless criminals target vulnerable Australians, Chartered Accountants Australia and New Zealand (CA ANZ) Tax Leader Michael Croker said.

“Criminals know that many Australians doing it tough want quick tax refunds and that creates easy targets for tax scams. Phone calls, SMS and emails are their favoured strike weapons, but fake online tax preparation sites can also crop up at Tax Time.

“While the Federal Government and the ATO have tightened online security, individual Australians should protect themselves from becoming a victim of tax fraud.

“From phone scams to tax identity theft, scammers often exploit key dates to make their threats more believable - and have taken particular advantage of the cash stimulus provided in response to the COVID-19 pandemic,” Mr Croker said.

“That’s why it’s vital to protect your information and remain especially vigilant this tax time.”

Mr Croker today shared five helpful tips to prevent Australians from falling victims to tax scams:

Michael Croker, Australian Tax Leader at Chartered Accountants Australia and New Zealand

1.  Protect Your Personal Information Online

“It sounds simple but make sure you protect your personal financial information online - using strong passwords and where possible, two factor authentication,” Mr Croker said.

“Reduce the amount of personal information you share online via social networking platforms and keep your financial affairs as private as you can.

“With only a few pieces of information, fraudsters may be able to hack into your accounts or impersonate you.

2.  Walk, don’t run and use trusted lodgement channels

The ATO starts full processing 2021 tax returns on 7 July 2021 and expects to start paying refunds from 16 July 2021. It says the majority of electronically-lodged tax returns will be processed within 12 business days of receipt.

“Sometimes the ‘pre-fill’ information from employers, banks, government agencies, health funds and other third parties doesn’t appear on ATO systems until late July,” Mr Croker said.

“Try not to rush things. Many people lodge before they have all of the information about their income and deductions so be sure to check you have all the records needed before lodging. That way you’ll smell a rat if a scammer later contacts you and says your tax return was incomplete.

“If lodging yourself, use myTax linked to your myGov credentials. Every year we hear stories of fake tax lodgement websites and fake emails which look like they’ve come from the ATO.

“Never give your tax details to a ‘mate’ willing to do your tax return for you, that’s like handing over your wallet.

“If using a tax agent, make sure they’re registered with the Tax Practitioners Board and beware of any agent promising a bigger tax refund by encouraging you to make dishonest claims.

“Good tax agents help you get your tax right. They calculate what you’re entitled to: no more and no less.”

3.  COVID-19 Scams

Scammers are adept at using issues like the Covid-19 pandemic to manufacture phishing scams to encourage Australians to click on links, or target robocall messages.

Expect scams focused on topics such as early access to superannuation, ‘overpayment’ of JobKeeper or JobSeeker and similar, said Mr Croker.

“They’ll make out that you’ve been overpaid or you weren’t entitled to COVID-19 benefits in the first place.”

With some State governments now offering business and individual cash support during lockdowns, some scammers might masquerade as State government officials too.

4.  Report All Suspicious Activity

“If you’re even slightly unsure whether an ATO interaction is genuine, do not reply. Instead contact the ATO to verify the interaction before you proceed,“ Mr Croker said.

The ATO hotline to verify if contact is genuine is 1800 008 540 and the Scamwatch website (scamwatch.gov.au) is also a useful up-to-date reference of current scams.

5.  Speak to Your Local Chartered Accountant

“If you have any concerns or questions when submitting your tax return, speak with your local Chartered Accountant,” Mr Croker said.

“Remember your local CA can file your tax return for you using secure online lodgement connections directly into the ATO’s systems and as your tax agent, they’ll deal with any ATO follow-up contact.

“’Talk to my accountant’ is a great line to use if a tax scammer calls.”