How the crooks use your tax file number

The increasing risk of identity theft is of concern to everybody.  And one of the most important identifying documents an Australian has is their tax file number.

Dodgy tax lodger

If a criminal obtains your TFN your identity can be compromised in several ways.  At a basic level a criminal can lodge your tax return early and include a range of bogus tax deductions.  When you then come to lodge your tax return you find that the ATO has already processed the return and you are now stuck with the problem that the ATO will not process it a second time.

Dodgy tax reporting

The second risk of criminals getting access to your TFN is that they will attach your TFN to a different identity.  A criminal gang could potentially generate a large profit through Bitcoin but let the operator (like Coinly) know that the account is held by you.  The criminals will then generate a large taxable gain and the ATO will believe that you generated the income personally and you personally will incur the large tax liability – while the criminals have left.

The same type of TFN reporting can also occur with banks and employers.  In effect any organization that reports your income to the ATO directly could be the target of a scammer.  The reason why criminals need to give a TFN is that legitimate companies, like a bank, are obliged to withhold tax at 47% if that do not have a TFN – so getting access to an innocent persons TFN will allow criminals the chance to dodge that withholding requirement.

Emailing a TFN is risky

An important part in protecting your TFN is controlling who you show it to and how you communicate the TFN to those people. Importantly email is not a secure form of communication.  Most email passes through a chain of email servers and criminal gangs target these servers searching for emailed TFN.  In fact, the Tax Practitioners Board has now release TPB(PN) 4/2021 which discourages tax agents from emailing TFN’s to clients.

At Westcourt we have been deleting client TFN’s from all correspondence for over 8 years.  And it is still worrying that some tax agents still email TFN’s as the recent warning by the TPB is only a “recommendation”.

How to protect your TFN

To protect your TFN you should always:

1. Use the latest software to make sure your security is updated.
2. Use anti-virus software.
3. Exercise caution when clicking on links providing personal information.
4. Never share your TFN on social media.
5. Avoid going to a government website through a link – only use portal access.
6. Do not deal with tax agents who send your TFN by email.
7. Avoid tax agents who do not use a portal.
8. Do not download attachments from the ATO.
9. Call the ATO directly on 13 72 86 if you are in doubt of a transaction.

What to do if you think criminals have your TFN

If your TFN is stolen or compromised you have a few difficult steps:

1. Contact your tax agent and see if any unusual transactions are happening on your ATO account.
2. You should contact the ATO on 1800 467 033 and talk to the ATO Client Identity Support Centre.

Importantly the ATO will not harass you about a compromised TFN, demand payment to repair fraudulent use of your TFN or expect payment in Bitcoin or Gift Cards (like Amazon etc).

At Westcourt the disclosure of TFN’s is taken seriously as we manage a large amount of highly sensitive data.  Our commitment to leading edge secure software like CyberArk, Xero and Business Fitness has meant that none of our clients have ever been subject to TFN identity theft and we are committed to make it stay that way.