Fraud can target any business, with numerous deceitful activities prevalent today. However, in recent years, scammers pretending to be from the Australian Tax Office (ATO) have increasingly contacted Australians. In 2022-23, the ATO received almost 20,000 reports of tax scams, approximately 360 reports per month.
According to the Australian Competition and Consumer Commission, in 2022, consumers reported an alarming $3.1 billion in scams, representing a significant surge compared to the previous year.
Safeguarding your business against the constantly evolving tactics of cybercriminals can be daunting. However, there are steps you can take to protect your business from hackers, cybercriminals, and identity thieves. In this regard, tax accountants in Sydney play a crucial role in preventing and addressing tax fraud.
Let’s learn more.
When tax time rolls around, many people receive calls or emails from scammers pretending to be from the ATO. These scammers may try to intimidate the individual to reveal their private, confidential details, such as bank details, myGov login details, or other information. The scammer may also impersonate a close personal acquaintance, such as a parent or a boss, making individuals send them money or buy gift cards for them.
A scammer may send an email saying an individual is eligible for a tax refund, asking them to click on a link to verify their details to access their refund. When the individual clicks on the link and fills in their details, the scammer gets access to everything they input, from their name, address, phone numbers, employment details to passport information, etc. Educating employees about the potential for tax scams during tax season can help you protect both your business and your employees’ personal finances.
Tax scams are different from tax fraud. Tax fraud occurs when individuals or organisations intentionally deceive the tax authorities to avoid paying their fair share of taxes. It can involve under reporting income, inflating deductions, or using false documents. Understanding the most common tax scams can help educate employees about potential threats.
Some common tax scams include:
- Phishing Scams: Cybercriminals may send fraudulent emails or create fake websites posing as legitimate tax agencies or the Australian Taxation Office (ATO). These messages often request personal information or payment details, aiming to steal sensitive data.
- Identity Theft: Criminals may use stolen personal information to file false tax returns, claiming fraudulent refunds in someone else’s name. This can lead to financial loss and complications for the victim. Accounting firms can assess your internal controls, identify vulnerabilities, and recommend measures to strengthen them.
- Preparer Fraud: Dishonest tax preparers may engage in fraudulent activities, such as inflating deductions, fabricating expenses, or manipulating income figures to maximise refunds.
- Impersonation Scams: Fraudsters may contact individuals or businesses by phone, pretending to be ATO agents, and demand immediate payment for tax debts or penalties. They often use intimidation tactics to coerce their targets into providing sensitive information or making payments. This includes coercive threats of legal action or substantial fines against businesses unless an immediate payment is made.
- Deceptive Investment Schemes: These scams present phony investment opportunities, often promising quick wealth or high investment returns. In cases where tax fraud has already occurred, tax accountants in Sydney can help detect and investigate fraudulent activities.
By implementing the following tips and strong security measures, you can significantly reduce the risk of falling victim to tax scams and protect your business and sensitive information.
In the event of an audit or investigation by tax authorities, tax accountants in Sydney can represent your business and communicate with tax officials on your behalf. They can provide explanations, present supporting documents, and navigate the complexities of the tax system to resolve any issues. Their expertise in tax matters can help mitigate penalties and protect your rights. This way, you will not be dealing with unidentifiable fraudsters.
Be cautious of unexpected phone calls, emails, or texts asking for personal information. Scammers may pretend to be representatives from well-known organisations, such as banks, and create a sense of urgency to trick you into taking action.
Legitimate businesses will never ask for your details or direct you to dubious websites. If in doubt, contact the organisation directly using the contact information listed on their official website.
Tax accountants in Sydney have the knowledge and expertise to identify irregularities, analyse financial data, and trace potential fraudulent transactions. By working closely with forensic accountants and auditors, they can gather evidence and build a case for further action.
Implement robust security measures to protect sensitive information, such as tax documents and employee records. This includes using strong passwords, encrypting data, regularly updating software, and restricting access to authorised personnel only.
You can significantly enhance your business’s security by securing your IT infrastructure with next-generation firewalls, anti-malware software, and advanced threat protection systems. Also, consider encrypting data and enabling role-based access permissions to make it more difficult for criminals to access your systems and steal sensitive information.
Conduct regular training sessions to educate your employees about tax fraud and scams. Teach them to identify red flags, report suspicious activity, and follow secure practices when handling sensitive information. By keeping your employees well-informed, you empower them to act as the first defence against potential scams.
Partner with reputable tax professionals or accounting firms with a proven track record in handling tax matters. These experts can guide tax compliance, help identify potential risks, and assist in implementing effective security measures. Their expertise and experience can be invaluable in protecting your business from tax scams.
Scammers constantly evolve their tactics, so staying informed and vigilant is crucial. If you need expert advice and innovative solutions to protect your business, consider partnering with Calibre BA. With over 100 years of combined commercial, tax, and business advisory experience, our unique team can provide fresh insights and comprehensive solutions tailored to your needs. So instead of searching for “accounting firms near me”, call us at (02) 9261 2177 to get started.