How to Recognise an ATO Tax Scam
Andrew Jeffers | April 17, 2018
ATO tax scams are everywhere!
I don’t mean people scamming the Tax Department. I mean people calling you and pretending they’re from the Tax Department (ATO), trying to scam money from you.
It can be an emotional and daunting situation if you’re told you’ve done something wrong to the Government and the Tax Department.
Find out why and how tax scams work and also what to do in case you’re being scammed.
What’s an ATO tax scam?
The first thing to understand is the Tax Department generally doesn’t call you to demand payment there and then.
When you owe the ATO money, they will not ask for it directly. They’ll usually collaborate with their tax collection agency.
Why does a tax scam work?
Scams work because people are fearful of the ATO. Generally, they think the ATO is watching their every move.
You don’t want to fight the Government over some small amount of money owed to them. So, it’s always best to pay all your taxes on time. That’s how you make sure you don’t owe the Tax Department any money.
Tip: Pay all your taxes on time. Knowing you’re on time with your payments, you won’t be fearful of the ATO.
You might also be interested in: ATO Scam Alert. Don’t Get Caught!
How does scamming work?
The scammers give you a phone call or leave a message on your answering machine saying, “You haven’t paid your tax. If you don’t pay it now, we’re issuing a court summons as we speak. You must call us immediately and have this sorted out.”
They will only stop these summons if you give them your credit card information or arrange a money transfer promptly.
Tip: Whenever you receive these types of calls from the so-called ATO, ask for a reference number.
Generally, the amount of money they’re after is probably less than $1,000. So if they do it 10-20 times a day, they are making about $10-20-30,000 a day.
You might also be interested in: Tax Scam
What can you do in case of an attempted tax scam:
1. Identify whether it’s a scam or not
You need to make sure the people calling you are from the Tax Department before you start giving any personal information. Be on the lookout for suspicious clues, like:
If they have an overseas accent, they might be from the ATO, but they also might not. So make sure you ask for an identification number and a name.
What sort of phone number are they calling from? Is it a local or an international phone number?
How to identify a tax scam?
Usually, the scammers will ask you to identify yourself. If they don’t ask you, don’t give out your personal information.
If you have suspicions whether or not the call is from the ATO be reluctant with giving any sort of personal information about you, your business or your bank accounts.
Here’s why: once they have your date of birth, your name and your tax file number, they pretty much can steal your identity.
2. Direct them to your accountant
If you have an accountant, don’t take any calls from the Tax Department, send them straight to your accountant.
Your accountant can spot a scammer in no time, so don’t take the risk. Let your accountant deal with these type of calls.
3. Go to moneysmart.gov.au
MoneySmart is a website run by the Australian Securities and Investments Commission (ASIC) to help people make the most of their money. They have fantastic resources to help you deal with any types of tax scams.
Protect your business from ATO tax scams
The key takeaway is this: you need an accountant. They are specialised in dealing with any sort of dangerous scamming situations knowing exactly how to handle them so you and your business can stay safe.
If you get a suspicious call, direct it immediately to your accountant. If you don’t have an accountant, here at Shuriken Consulting we can give you a hand with that. Let’s get in touch today!