Scam artists frequently pretend to be representatives from the Canada Revenue Agency in order to obtain a taxpayer’s personal information, including bank account, social insurance and credit card numbers. The CRA has warned Canadians to be aware of these scams and be vigilant when using tax information.
Donation Tax Shelter Schemes
As of 2015, over 190,000 Canadians have had their tax returns reassessed by the CRA after falling prey to a donation tax shelter scheme, and over $6.3 billion dollars in fake charity deductions have been identified and denied by the agency.
In this popular scheme, taxpayers are urged to donate to a charity. If they donate, the charity representatives claims that they will receive a donation receipt for up to four times the amount they donated. In reality, these groups are not charities. They simply take the donation money and run, leaving unsuspecting taxpayers with phony receipts and fraudulent returns.
Telephone Phishing Fraud
Another common type of fraud is the telephone phishing scam. This involves a fake representative of the CRA calling a taxpayer and requesting personal information. In many cases, the fraudster tells the victim that money is owed to the CRA and may even threaten legal consequences if the taxpayer doesn’t comply with the demand for information.
When the taxpayer shares this information, the fraudster has everything needed to commit identity theft. As a result, they can potentially steal money from the individual’s bank account or can open fraudulent accounts in the taxpayer’s name.
Email Phishing Scams
Phishing emails claiming to be from the CRA often feature compelling promises such as an extra refund. They typically contain a link to a fraudulent site where individuals are asked to enter personal information, which is then stolen by identity thieves.
Avoiding CRA Scams
The high-tech nature of many scams can make it easy to fall for them, but the CRA has released tips for taxpayers to help them avoid these fraudulent schemes. For example, before donating to any charity, you can use the CRA’s charity database to ensure that the charity is registered and legitimate.
If you receive a call from someone claiming you owe money to the CRA, you can use the CRA’s My Account online service to check your balance. Alternatively, you may hang up and call the CRA through one of the numbers on their website to confirm whether the call is legitimate.
If you receive an email asking for personal information, keep in mind that the CRA will never ask for personal information via email. In particular, representatives from the CRA will never ask you for access codes, user IDs, passwords and PINs. In most cases, the agency won’t even send email directly to your email account. Instead, it sends a notification to your email address that you have mail ready to view on the My Account portal.
If you fall victim to a scam, you must contact the CRA. You may contact the e-Services Helpdesk if any of your online information has been compromised. If your social insurance number was stolen, contact Service Canada immediately.