Tax season has begun and local residents are being warned about scammers trying to take advantage of you.
The usual con behind most of these scams is where scammers pose as the Canada Revenue Agency (CRA), trying to trick you into either paying up or sharing personal information.
However, because more people are expected to file their taxes online this year, BBB is encouraging the public to keep an eye out for online tax scams.
Watch out for online tax scams this year
The CRA wants us to go digital this tax season. This year, Canadians are being encouraged to file their returns electronically and as soon as possible. Online filing opens today, February 22, 2021 and ends on April 30, 2021. Filing online is expected to allow the CRA to produce your notice of assessment (NOA) and refund faster, as well as avoid delays. If you choose to file a paper return, the CRA anticipates that it may take 10-12 weeks for them to issue your NOA due to on-site processing limitations in tax centres.
"While filing taxes online is faster and more convenient, it also widens the net of scams being used to target Canadians," explained Karla Laird, Manager for Community and Public Relations at BBB. "Taxpayers will need to keep an eye out for versions of phishing emails with malicious links, fake CRA websites, and communications through non-traditional mediums like text messages and direct messages on social media. The scammers may use the ongoing pandemic as a reason to encourage you to engage with them."
In a BBB Scam Tracker report, a consumer shared that she received an email saying, “You have a refund of $700 this year. Click here to claim it. Link expires in 5 days." This is a classic example of an online phishing tax scam. The email includes a link; the communication is enticing and encourages the recipient to click; and the link is likely to take you a website controlled by the scammer and not the CRA. Remember that emails from the CRA will only be notifications, will never include links and will never ask you to reply with private information.
CRA Impersonation Scams
While Canadians are now much better at identifying and avoiding CRA scam calls, they are unlikely to go away this year. These scams most often start with a phone call where you hear a serious and official sounding “robocall” recording. Reports to BBB Scam Tracker explain that the scam can take two basic forms:
· The CRA "agent" says you owe back taxes and pressures you into paying a certain amount. If you do not comply, the scammer threatens you with arrest and fines.
· Scammers claim they are issuing tax refunds and ask you for personal information so they can send your refund. This information can later be used for identity theft. Scammers also use this approach to target college students by claiming a "federal student tax" has not been paid.
The imposters often go to great lengths to appear real. The scammer may give a fake badge number and name. Your caller ID may look like the call is coming from Ottawa. Scammers typically try to push you into action before you have time to think and insist that payment must be made by wire transfer, prepaid debit card, credit card or even bitcoin.
The scammers have not been waiting until the start of tax season to call. BBB received its first report of tax scam calls on January 5. Some reports share that the scammers are persistent and menacing, calling as often as five times per day from five completely different local numbers. BBB investigations have found that most of the numbers were spoofed to help keep the scammers' identity anonymous and at the same time, also encourage British Columbians to answer their phones when they see a local number calling.
Tax Identity Theft Scams
Another tax scam to look out for is tax identity theft. This occurs when a scammer uses your Social Insurance number to file a tax return in your name and collect your refund. It can also be someone using your information to get a job. Consumers do not usually realize they have been victims of tax identity theft until they get a written notice from the CRA saying that more than one tax return was filed, or they were paid by an employer they do not know.
Tips to avoid tax scams
· File your taxes as early as possible. File before a scammer has the chance to use your information to file a fake return.
· Only deal with trustworthy tax preparation services. For many people, major life changes, business ownership, or simply a lack of knowledge about the ever-changing tax laws make finding a trustworthy tax preparer a good idea. That said, not all tax preparers have the same level of experience and training. Visit bbb.org to find tax preparers in your area.
· Remember that the CRA does not initiate contact with taxpayers by email, text message or social media. CRA emails will never request personal or financial information, PIN numbers, passwords or similar access information for credit cards.
· Check out websites carefully. Make sure you are accessing the real CRA website when filing your taxes electronically or inquiring for additional information.
· Use unique and complex passwords. Always use unique passwords for your CRA and online banking accounts. Do not reuse the same password for different systems. You increase the risk of scammers gaining access if there is a data breach on another platform that uses the same login details as your CRA account.
· Create a PIN. Set up a personal identification number (PIN) once you log into My Account on the CRA website or you can call them and set it up with the help of one of their call centre agents. This will help to confirm your identity for future calls with the CRA.
· Sign up for email notifications from the CRA. This service notifies taxpayers by email if their address or direct deposit information have been changed on CRA records. These notifications can act as an early warning for potential fraudulent activity.
· Act immediately if you have been scammed. If you are a victim in Canada, contact your local police service. If you believe your Canadian Social Insurance Number has been stolen, contact Service Canada at 1-800-206-7218. Also report it to BBB Scam Tracker so you can help to warn others.