Beware of telephone calls or emails from persons pretending to be CRA agents and asking for personal information or promising you a tax refund.
According to the Canada Revenue Agency (CRA), an increasing number of Canadians are receiving telephone calls from persons falsely presenting themselves as CRA agents and aggressively asking for personal information such as credit card, bank account, passport numbers and even social insurance (SIN) numbers. (Keep in mind that CRA already knows your SIN.) This type of telephone scam, as well as other similar kinds of scam perpetrated through email, could result in identity theft and significant financial loss for unsuspecting taxpayers.
How the Scam Works
The bogus calls have a readily recognizable structure.
- Callers identify themselves as “CRA agents”, provide an “ID number” and return telephone numbers within the local tax office area code.
- Callers usually make one or more of the following accusations (often in aggressive and threatening language):
- Your taxes are in arrears and outstanding amounts must be paid immediately or bank accounts, personal assets or businesses will be seized. The amount is usually between $700 and $2,500, amounts small enough to be payable through a line of credit or a credit card.
- CRA has issued a warrant for your arrest or deportation because back taxes have not been paid and the police are on their way to your home or place of business.
- You have been involved in a fraudulent activity and are under investigation.
- Your tax returns have been audited and you owe money.
- The fraudster might also suggest that instead of being in trouble you are to receive a refund. Usually the amount is small enough to be believable but large enough to be enticing. The amount will be deposited directly into your bank account via an Interac transfer, but the caller needs your bank account number to make the direct deposit. The fraudster may also ask you for your social insurance number, driver’s licence number and date of birth just to “confirm” they are talking to the right taxpayer. The risk is not just that the fraudster might access your bank account but that the fraudster now has some of your unique identifiers that can be used later to steal your identity.
- The caller counters objections by assuring the frightened taxpayer of one or more of the following:
- If all or partial payment is made they will not proceed with collection procedures that would freeze all bank accounts, seize your home or close the business.
- The “warrant” for these measures can be revoked and the police called off if the taxes are paid immediately.
- As a show of good faith, the taxpayer should provide a deposit.
- The CRA will take no further action if the taxpayer pays the arrears for the oldest one or two years immediately.
- After making their “pitch”, the scammer adds a tone of authenticity to the call by providing a telephone number for the taxpayer to call if they wish to confirm the call is really from the CRA. This is a false number to a fellow fraudster who simply answers the phone, “Canada Revenue Agency-Collections, Agent X speaking”.
CRA protects the confidentiality of personal tax information.
How the CRA Actually Works
Taxpayers should know that the CRA does NOT:
- request personal information by email
- ask for driver’s licence, health card, social insurance or passport numbers
- leave or ask you to leave voicemail messages containing details of taxes owing or refunds available
- discuss personal details of your tax situation with anyone other than you unless you have provided the appropriate authorization
- make calls that threaten immediate arrest or seizure of bank accounts or other assets
- send the police, jail or deport anyone
How You Should Take Action
If the call sounds too good to be true, or the “CRA agent” uses aggressive language, or if the “agent” asks for information you know is already on file with the CRA, HANG UP IMMEDIATELY. Do not engage in conversation, and do not answer any questions.
If you receive the request by email, do not click the link, which could automatically download malware that could harm your computer and put your personal information at risk.
If in doubt about the authenticity of an email or telephone call concerning your taxes, call the CRA at 1-800-959-5525 for businesses and 1-800-959-8281 for individuals. Also, contact the Canadian Anti-Fraud Centre at www.antifraudcentre-centreantifraude.ca or call toll free 1-888-495-8501. For additional information on taxpayer fraud, go to the CRA website at www.cra.gc.ca/security.
The preceding article is reprinted from the October 2015 newsletter Business Matters with the permission of the Chartered Professional Accountants of Canada. Business Matters is a bi-monthly newsletter, the full version of which can be obtained on request.
This post deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents or for any consequences arising from its use.