Most people work hard to build a level of wealth by saving or investing.  That wealth can be lost in a single transaction by unscrupulous criminals who prey on unwary and vulnerable people.  For want of a better term, these criminals are called scammers.

The Australian Taxation Office (ATO) recently warned Australians about scammers using new methods to exploit unsuspecting victims. The ATO and Police agencies are working hard to detect these scammers, but their tactics are sophisticated which make them difficult to apprehend.  Once caught, the Courts should convict and jail them for a long period.

Below are two examples of the mechanisms used by scammers.

1. Using tax payment deadlines

Scammers are using multiple channels to contact people (for example telephone calls, emails, SMS and messaging apps such as WhatsApp) and impersonating ATO officers. Scammers contact people inviting them to update their personal details. The scammer then ‘steals’ the victim’s identity.

Scammers use the fact that some taxpayers have tax payments due at certain times of the year to create a veil of legitimacy. The ATO warns that between November 2018 and January 2019 over $2 million was lost to scammers pretending to be from the ATO.  The likelihood of recovering that money is extremely remote.

To avoid being a victim of fraud, before making any payments, the ATO encourages taxpayers to check their latest notices of assessment, which include detailed information regarding outstanding tax debts. Alternatively, taxpayers can check their tax positions online via myGov or simply confirm with their tax agents/accountants any amounts owed.

To avoid being scammed, the ATO offers the following tips:

  • Never click a hyperlink in an email or SMS asking you to log on to government services – The ATO does not send these kinds of messages;
  • Never pay a tax debt via cardless cash, iTunes, Google Play cards, pre-paid Visa cards, cryptocurrency or direct credit to a personal bank account – the ATO does not accept these methods of payments;
  • Do not be pressured by a threat of immediate arrest, jail or deportation by a person who claims to be an ATO officer – ATO officers do not make such threats.
  • A person who has received a call from a scammer can ring the ATO’s special hotline on 1800 008 540 to report the incident.
2. Advising you to withdraw your superannuation early

The ATO recently acted against a woman from NSW in the Federal Court for her role as a promoter and facilitator of an illegal early-release-of-super scheme.

The woman, who was neither a registered tax agent nor a financial adviser, assisted 68 individuals in the establishment or intended establishment of 35 Self-Managed Super Funds (SMSFs). She charged a fee to clients (who were not yet legally entitled to withdraw amounts from their superannuation funds) to transfer their super balances from an Australian Prudential Regulation Authority (APRA) regulated fund to an SMSF on the false premise that they were entitled to withdraw the funds immediately from the SMSF for their own use, sometimes as soon as the same day.

The ATO acted to shut down the scheme and disallow the woman from promoting the scheme further. A financial penalty of $220,000 was imposed on her by the Court. The woman was also banned from setting up SMSFs for seven years.

Withdrawals from super funds can only be made once a condition of release has been satisfied e.g. when you turn 65 (even if you haven’t retired), when you reach preservation age (minimum 55 years if born before 1 July 1960) and retire, or under the transition-to-retirement rules while continuing to work. You can only access your super fund balances earlier under exceptional circumstances relating to certain medical conditions or severe financial hardship.

If you are ever contacted, unprompted, by someone claiming to offer tax or superannuation advice, asking you to make a tax payment or a withdrawal from your superannuation account, or claiming to be an ATO Officer, and you have doubts over that person’s legitimacy, contact the ATO, Nexia or the ACCC’s ScamWatch hotline (www.scamwatch.gov.au).


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