Need to know
- The new financial year is a common time for tax-related scams
- Many involve criminals impersonating tax officials in attempts to get your money or information
- There are five common types of scams to look out for, each with their own red flags
Tax time is a prime season for scammers.
It's a period where we're often waiting to hear from the government about refunds we'll receive or debts we'll have to pay.
After last year, when a lot of us found ourselves with unexpected tax debt following the end of widespread low and middle income offsets, news of more money owing or a surprise refund will grab the attention of many.
Knowing this, criminals will likely be seeking to tap into this financial anxiety, posing as tax officials promising returns or demanding debts.
In the 2022–23 financial year, the Australian Tax Office (ATO) saw reports of these impersonation scams increase by 25% to reach over 25,600 and authorities are already warning of more phishing attempts ahead this tax season.
With the ATO itself admitting these scams are becoming harder to spot, we've trawled through the most common types of tax scam to bring you the five you should be watching out for this year.
On this page:
- 1. Requests for information
- 2. Protection panic
- 3. Promising refunds
- 4. Demanding debts
- 5. Fees for free services
1. Requests for information
Despite it being weeks before most of us will be preparing our tax returns, scammers are already trying to steal sensitive details using a classic technique.
The ATO says it's seen fake emails with its logo urging recipients to follow a link to update or verify their details in order to get their tax affairs in order.
These links lead to fake copies of myGov – the online hub for many federal government services – designed to collect your login credentials.
Fake ATO accounts on social media may contact you and ask for information. Source: ATO
Once they have these, scammers can change your bank details so that any payments are directed to them or commit tax refund fraud in your name.
Malicious myGov copies are a scammer favourite – administrator Services Australia responded to over 6000 attempts to impersonate the site last year.
Criminals seeking sensitive information have also been known to set up fake ATO accounts on social media sites such as Instagram and X.
Using these fake accounts, scammers respond to people trying to contact the real ATO, then claim to be able to help and invite them to chat via direct message, where they try to steal personal information.
How to spot them
The ATO will never send you links over email or social media to log in to online services like myGov or ask you to provide any personal information through these channels.
Therefore, any communications that appear to come from the tax office asking you to do this should be treated as a scam.
The ATO is active on Facebook, LinkedIn and X, but will never try to contact you through these channels. They are not on Instagram at all, so any attempt to contact you there is definitely a scam.
You can spot phishing attempts on other social media platforms by taking a closer look at the accounts purporting to be the ATO.
The organisation's official profiles have tens of thousands of followers and have been active for up to 10 years, so steer clear of any ATO-affiliated account that doesn't have many followers or was created recently.
2. Protection panic
Scammers have deployed QR codes in attempts to phish for information. Source: ATO
Another recent scam has seen criminals posing as the ATO claiming the tax office is upgrading its security and wants users to update multi-factor authentication on their account.
These scam emails contain a link or QR code that leads to a fake myGov website designed to capture your login information.
This comes as more and more scammers have been using QR codes to phish for our details, with recent 'quishing' attempts targeting users of other government services like Medicare and companies such as Microsoft.
For more on why criminals are employing this novel method, see our quishing investigation.
How to spot them
QR codes might be common in other parts of daily life, but the ATO will never send you one to log in to its online services. As mentioned above, any links are also a red flag.
3. Promising refunds
With the current cost-of-living pressures, many of us would happily welcome news of a tax refund.
But, as ever, scammers are ready to take advantage of this and will likely be reaching out in the coming months and promising quick access to money.
The ATO often sees SMS messages and emails from scammers posing as tax or government officials, asking victims to enter bank and credit card details and other personal information in order to get a tax refund.
In previous cases, victims have also been asked to pay a fee with a credit card in order to get a refund processed.
Tempting promises of refunds are a common tax scam tactic. Source: ATO
How to spot them
If the ATO does require information about you, they may use SMS or email to ask you to contact them, but they will never request you provide them information through those channels or use them to send you a link.
The tax office will also never ask you to pay a fee in order to get a tax refund, so anyone requesting this is a criminal attempting to defraud you.
4. Demanding debts
Tax debts have been front of mind for many recently and just as scammers exploit our appetite for a refund, they're also known to take advantage of the fact that the ATO will sometimes request money from us.
In a classic case, scammers impersonating tax officers may contact you by phone or SMS, claiming you haven't paid enough tax and demanding you pay them immediately to cover the shortfall.
To get you to act quickly, they might also claim that a warrant will be issued for your arrest unless you pay right away.
Scammers have also been known to claim that your Tax File Number (TFN) has been suspended due to illegal activity and that you'll need to make a payment to avoid being arrested or to protect your TFN.
Phone scammers may claim you owe the ATO money and threaten you with arrest in attempts to get you to transfer funds.
How to spot them
The ATO doesn't suspend TFNs and will never threaten you with immediate arrest or demand you stay on the phone until a payment is made, so anyone employing these tactics is a criminal.
The ATO will also never make you pay with gift cards, vouchers or cryptocurrency or ask you to transfer money to a personal bank account to settle a tax debt.
5. Fees for free services
Con artists passing themselves off as being from the tax office may also offer services (for a price) which are actually available from the ATO for free.
For example, ads offering to help you get a TFN for a fee have been known to circulate on social media. In reality, these posts direct victims to websites built to steal money or personal information.
How to spot them
Applying for a TFN is free and can be done through the official ATO website. If you're applying for one through a tax agent, check that they're registered with the Tax Practitioners Board.
How to report a tax scam
If you receive suspicious communication from the ATO, don't give away any information, click any links or scan any codes. Call the ATO on 1800 008 540 to double-check what you're being told.
If you've encountered a scam, report it to the ATO by emailing screenshots of social media posts and accounts or SMS messages to reportscams@ato.gov.au. You can also forward suspicious emails to the same address.
If you've given money or personal information to a scammer, contact the ATO on 1800 008 540. Also report these incidents to your financial institution, IDCare and ReportCyber.
For more on what to do in this situation, read our guide to the five things to do if you've been scammed.
Stock images: Getty, unless otherwise stated.
