Businesses and entrepreneurs are being warned to ensure they keep personal details such as tax file numbers safe after the Australian Taxation Office released figures in which it said that out of 68,000 returns suspected of being potentially fraudulent, 5,000 of those have been identified as potential cases of identity crime.
Identity crime has been one of the most popular cases of fraud over the past few years, especially as more people start putting information on sites such as Facebook. Various surveys also show identity crime is consistently ranked as one of Australians’ highest concerns.
The ATO says that since 1 July, around 68,000 refunds of over $285 million are believed to include overstated claims, or could be potentially fraudulent, while over 5,000 of those with claimed refunds of around $27 million have been labelled as suspected identity crime cases.
Bill O’Shea, principal at accounting firm Robert J Nixon & Associates, says identity fraud is becoming more popular through a variety of different methods.
“There are a number of ways people defraud the tax office, and even tax agents have been known to do it,” he says. “The scenario is where the accountant does a tax return, and then tells the client they are getting a specific figure.”
“But after signing a paper that allows the accountant to deduct their fees from the return, the accountant alters the return and dumps more money into their own account, and you’re none the wiser.”
O’Shea says tax-related identity crime comes after fraudsters have stolen tax file numbers, and then use them to file amended returns on behalf of their victims.
“With identity fraud, what happens is you steal someone’s tax number, and then you put in an amended return,” he says.
“You just put in an excuse saying ‘I left these claims out of my return’, it gets lodged, and then they get the return. They can do it themselves, because everything is online now.”
O’Shea laments what he believes to be a lack of policing the online tax system, saying that “by the time the ATO can check fraudulent returns, often you can be long gone.”
“I can lodge an assessment on behalf of someone else if I know their tax number. And if it’s a fraudulent return, it’s very hard to track someone down.”
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