Be Careful Of Scams This Tax Season

A sign for the National Headquarters of the Canada Revenue Agency (CRA). Every year, Canadians lose millions to tax fraud.

It’s officially tax-filing season, one of the most stressful times of the year. To make matters worse, scammers are on the prowl trying to trick taxpayers into divulging personal information through phone, email, text message, and mail. Here are some of the ways scammers are trying to defraud you and how you can protect yourself.

By Phone

Have you received a call from a “CRA employee” claiming that you urgently owe back taxes? If so, you’ve received a scam call (vishing). You’re not alone: Many Canadians receive these fraudulent calls trying to scam them out of money, sometimes multiple times per day. Unfortunately, Canadians lose millions every year to vishing scams.

These vishing scams usually follow the same scripts: You either owe money for a tax obligation or are entitled to a refund. Either way, you need to act immediately or possibly face legal repercussions. Next, you are transferred to a scam artist to arrange for the payment or receipt. You will then be asked to provide payments (usually in a cryptocurrency such as Bitcoin or in large amounts of gift cards) to settle the “debt” or be asked to disclose personal information to “process” the refund. In either scenario, scammers defraud you, and you can lose thousands.

According to the CRA guidelines, here is what you can expect if the CRA communicates with you via phone:

The CRA may:

  • verify your identity by asking for personal information such as your full name, date of birth, address and account, or social insurance number
  • ask for details about your account, in the case of a business enquiry
  • contact individuals or businesses about a tax debt
  • call you to begin an audit process
  • phone you to offer free tax help for your small business
  • call your organization or association to offer support in helping your clients access benefits and credits

The CRA will never:

  • demand immediate payment by Interac e-transfer, bitcoin, prepaid credit cards or gift cards from retailers such as iTunes, Amazon, or others
  • use aggressive language or threaten you with arrest or sending the police
  • leave voicemails that are threatening or give personal or financial information

By Email

Scammers commonly use social engineering to manipulate people into disclosing personal information. This tactic relies on tricking people into giving them confidential information such as their passwords or banking information or granting access to their computer.

Email scamming (phishing) is one of the most common social engineering tactics cybercriminals use. You may receive an email from a seemingly legitimate CRA account asking you to fill out a form or download an attachment or file. The website forms usually ask for personal and financial information, which the scammers then harvest and use to defraud you. And if you download the attachment or file, you will likely install malicious software (malware) that attackers can use to take over your device.

Here are the ways the CRA may communicate with you through email:

The CRA may:

  • notify you by email when a new message or a document, such as a notice of assessment or reassessment, is available for you to view in secure CRA portals such as My Account, My Business Account, or Represent a Client
  • email you a link to a CRA webpage, form, or publication that you ask for during a telephone call or a meeting with an agent (this is the only case where the CRA will send an email containing links)

The CRA will never:

  • give or ask for personal or financial information by email and ask you to click on a link
  • email you a link asking you to fill in an online form with personal or financial details
  • send you an email with a link to your refund
  • demand immediate payment by Interac e-transfer, bitcoin, prepaid credit cards or gift cards from retailers such as iTunes, Amazon, or others
  • threaten you with arrest or a prison sentence

By Text Message/Instant Message

The CRA never uses text messages or instant messaging services such as Facebook Messenger or WhatsApp to communicate with taxpayers about tax-related issues. If you receive a message through these channels claiming to be from the CRA, it is a scam.

By Mail

Many taxpayers are aware of the other forms scammers use to trick and defraud them. However, mail scams can seem much more realistic and be challenging to spot.

For example, you may receive a letter claiming that a warrant has been issued to you because of unpaid tax obligations. Frighteningly, the note may assert that the warrant could result in arrest if you do not pay immediately. There may even be personal details included, adding to the realism. However, this is a scam attempting to play on your emotions by creating senses of fear and urgency.

Here’s what to know if the CRA contacts you through mail:

The CRA may:

  • ask for financial information such as the name of your bank and its location
  • send you a notice of assessment or reassessment
  • ask you to pay an amount you owe through any of the CRA’s payment options
  • take legal action to recover the money you owe, if you refuse to pay your debt
  • write to you to begin an audit process
  • write to you to offer free tax help for your small business

The CRA will never:

  • set up a meeting with you in a public place to make a payment
  • demand immediate payment by Interac e-transfer, bitcoin, prepaid credit cards or gift cards from retailers such as iTunes, Amazon, or others
  • threaten you with arrest or a prison sentence

How To Protect Yourself From Tax Fraud

The CRA provided numerous tips to stay safe from identity theft and tax fraud, including:

  • Never provide personal information through the Internet or by email.
  • Be suspicious if you are ever asked to pay taxes or fees to the CRA on lottery or sweepstakes winnings.
  • Keep your access codes, user ID, passwords, and PINs secret.
  • Keep your address current with all government departments and agencies.
  • Choose your tax preparer carefully! Make sure you choose someone you trust and check their references. Always review your return, agree with the content before filing, and follow up to ensure you receive your notice of assessment.
  • Monitor your tax accounts by registering for My Account or My Business Account.
  • Before supporting any charity, use the CRA website to find out if the charity is registered.
  • Be careful before you click on links in any email you receive. Some criminals may be using phishing scams to steal your personal information when you click on the link.
  • Caller ID is a useful function. However, criminals can alter the information displayed. Never use only the displayed information to confirm the caller’s identity.
  • Protect your social insurance number. Don’t use it as a piece of ID and never reveal it to anyone unless you are certain the person asking for it is legally entitled to that information.
  • Pay attention to your billing cycle and ask about any missing account statements or suspicious transactions.
  • Shred unwanted documents or store them in a secure place.
  • Immediately report lost or stolen credit or debit cards.
  • Carry only the ID you need.
  • Do not write down any passwords or carry them with you.
  • Ask a trusted neighbour to pick up your mail when you are away, or ask that a hold be placed on delivery.

What To Do If You Were Scammed

If you suspect you were a victim of tax fraud, contact your local police service immediately. You should also contact your bank if scammers have your financial information and change your passwords on all of your accounts. Ensure that you also report the incident to the Canadian Anti-Fraud Centre.

Stay Vigilant To Tax Fraud

As of February 28, 2021, Canadians have already lost $34.6 million to fraud this year. This tax season, scammers will be looking to trick taxpayers out of their hard-earned money. Stay scam aware and protect yourself from tax fraud.

If you would like help in protecting your business from scammers and hackers, please contact us at Design2Web IT today and see how we can help.

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