For the past couple of years, people have been falling victim to the CRA scams. No, the Canadian Revenue Agency isn’t scamming people out of their money. Rather, people are pretending to be the CRA to scam others out of money and sensitive information. It is easier then you’d think to fall trap to these ploys. Many of these scammers go to great lengths to be convincing. They use fake CRA identification numbers, sound polite, and make almost mirror image copies of official websites and forms. Here are some ways to spot a CRA scam and what to do when you identify one.
A common scam that people pull is calling individuals claiming they owe tax money and that they need to pay immediately. The CRA will not call, at least not without having mailed you a bill first and they will never call demanding an immediate payment. It is easy to see how people fall trap to this scam, though. The threat of an audit or overdue payment to the government can be scary and if one hasn’t used an accountant for their taxes they may begin to second-guess their bookkeeping. Don’t trust a phone call from the CRA unless you have already received written and mailed warning.
If you have ever gotten a call, email, or piece of mail demanding you pay an amount in taxes without an opportunity to question or appeal the amount, this is a scam. The CRA isn’t nearly as demanding as scams make them out to be. A real CRA representative will take the time to answer all your questions and discuss payment options and timelines with you. If you get a payment demand like this, be sure to ask your accountant and call the CRA from the official phone number.
Required Payment Methods
For scam artists, certain payment methods are preferred over others. This is why CRA scams will require you to pay taxes using a specific method. The CRA has a long list of acceptable payment methods and they would never narrow it down to such a specific requirement. Wire transfers, cash, and prepaid debit cards are a favourite among scams, since it is easiest for them to cash in on and harder to track.
Credit Card Numbers Over the Phone
The CRA will never ask for you to give your credit or debit card numbers over the phone. You should also never give out this information over the phone unless you are 100% certain you know who is calling.
Threats of Law-Enforcement
If you do not pay your taxes or have committed fraud you could potentially face legal repercussions. However, the CRA will never call and threaten to call in police or law-enforcement for not paying. There is a lengthy and legitimate legal process they go through for situations like that. CRA scams frighten people into paying immediately with such threats.
When a scam happens through email it is referred to “phishing”. In this case, scammers will send out official looking emails to trick people into thinking they are the CRA. They often seek out personal information that can then be used against them. They may ask for PIN numbers, social insurance numbers, and credit card numbers or send you to sites that install malware on your computer. Show your accountant any emails such as these and always call the CRA official number if you have any questions.
Tax Refund Scams
Releasing information in regards to tax refunds is a big scam tax payers fall victim too. They release personal and financial information in hopes of getting their money. The scams then use this information against them. If you are going to receive a tax refund you will be mailed an official notice from the CRA. Double-check everything with your accountant before giving out any information.
What To Do If You Come Across a Scam
If you come across what you think is a CRA scam there are a number of things you can and should do. First, double-check everything with your accountant. Your accountant will be able to tell you if you owe anything, if you’re owed anything, or if something looks fishy.
If you think you might owe something but aren’t sure about it call the CRA’s official number for help. If you think you’re being targeted for a scam, report it to one of the official CRA hotlines and file an official complaint. Always remember that the CRA doesn’t use unsolicited emails, texts, calls, or any social media to get personal and financial information from you.
To learn more talk to your Chartered Accountant or contact the Canadian Revenue Agency today.