How To Spot A Tax Scam and Protect Your Business

You’ve put your heart and soul into building your business, but all it takes is one tax scam to jeopardise everything. It’s a nightmare scenario, but sadly, it happens far too often. That’s why defending your business from scams is more than just a precaution; it’s a necessity. 

Scammers are getting smarter by the day, and they can be incredibly convincing. They go to great lengths to impersonate trusted organisations, mimicking their phone numbers and emails. As a business owner, you’ve got to be armed with the right strategies to defend against these threats. Which means being able to spot scams and get help from trusted professionals. 

The Tax Scam Landscape

Tax scams are constantly evolving, with fraudsters developing new tactics to deceive businesses. They adapt to the latest trends and technologies, from traditional phone scams to sophisticated phishing emails. It’s essential to understand the ever-changing landscape of tax scams to protect your business effectively.

Recognising the Evolving Tactics

The first step in protecting your business is recognising the tactics that scammers use. These tricks range from impersonating tax authorities to offering fraudulent services. Being aware of these tricks is your first line of defence.

Common Types of Tax Scams

Here are some of the most common tax scams and business scams targeting Australian businesses:

Tax Time Scams
Scammers often contact businesses during tax time, claiming to be from the Australian Taxation Office (ATO). They may threaten you with fines or penalties if you don’t pay a tax refund or provide personal information. 

Payment Redirection Scams
Scammers may hack into your email account or send you a phishing email that looks like it’s from a legitimate supplier. The scammers change the payment details on an invoice so that your payment is redirected to their bank account.

False Billing Scams
Scammers will send you an invoice for goods or services that you never ordered. They may hope that you will pay the invoice before you realise that it’s a scam.

Overpayment Scams
Scammers may send you a cheque or money order for more than you owe them. After this, they will then ask you to refund the difference, which is actually your own money.

Warning Signs of a Tax Scam

Identifying warning signs of a tax scam is crucial to protecting your business. Here are some red flags that should raise your suspicions:

  • Unsolicited contact: The ATO will never contact you out of the blue to ask for personal or financial information. If you receive an unsolicited email, phone call, or text message claiming to be from the ATO, it is likely a scam.
  • Threatening language: Scammers may threaten you with fines, penalties, or even arrest if you do not comply with their demands. The ATO will never threaten you in this way.
  • Requests for personal or financial information:  Never give your bank details or tax file number via email or phone. If you are asked for this information, it is a scam.
  • Urgent requests: Scammers may pressure you into making a quick decision by claiming that you must pay a tax refund immediately or face penalties. The ATO will give you plenty of time to resolve any tax issues.
  • Poor grammar and spelling: Scammers often send poorly written emails or text messages. 

Protecting Your Business from Tax Scams

Protecting your company from tax scams is not just a goal; it’s an ongoing mission. Here are some engaging strategies to keep your business safe:

Empower Your Team: Start by educating your employees. Equip them with the knowledge to spot tax scams and provide clear instructions on what to do if they suspect they’re in the crosshairs. Make sure they can recognise common red flags, like unsolicited messages, personal info requests, or threatening language.

Lock Down Your Finances: Implement robust internal controls. Make sure your financial information is safeguarded. Set up procedures to prevent unauthorised access and ensure all payments are properly authorised. 

Tax Preperation For Peace of Mind: Consider partnering with a reputable tax accountant, like the team at GC Accountants. This ensures your tax returns are filed correctly and all deductions are rightfully claimed, minimising the chances of errors or fraudulent activities.

Stay in the Know: Stay current with the ever-changing tax landscape. Being up-to-date with the latest tax laws and regulations helps you identify emerging tax scams and guarantees compliance with tax requirements.

tax scams

What To Do If You Suspect a Tax Scam

If you suspect a tax scam, the best thing to do is to err on the side of caution and avoid doing business with the person or company in question. You should also report the scam to the Australian Taxation Office (ATO).

Here are the steps you can take if you suspect a tax scam:

  • Do not engage with the scammer. Do not reply to emails, answer phone calls, or click on any links.
  • Gather evidence of the scam. Examples include emails, text messages, phone call records, or any other documentation that shows the scammer’s contact information and the nature of the scam.
  • Report the scam to the ATO. You can report them online or by calling the ATO on 1800 008 540.
  • Monitor your financial accounts for any suspicious activity. Hackers may try to access your bank accounts or steal your personal information. If you see any suspicious activity, contact your bank immediately.
  • If you have already provided the scammer with any personal or financial information, you should change your passwords and security settings immediately. You should also contact your bank or financial institution to inform them that you have been the victim of a scam.

The Most Effective Way To Protect Your Business 

In the intricate world of taxes and financial regulations, the line between legitimate and fraudulent can sometimes blur. A professional and reliable tax accountant can help you against potential tax scams. They’re your early warning system, trained to spot the red flags and adept at keeping your financial information secure. 

If you’re looking for seasoned professionals who can provide this level of protection, don’t hesitate to reach out to GC Accountants, because safeguarding your business is what we specialise in. Remember that the best defence against tax scams is awareness and proactive protection.


How can I distinguish a legitimate email from a tax scam?

Look for signs like grammar mistakes, unusual payment requests, and unsolicited communication. When in doubt, verify the sender through official channels.

Are there any tech tools that can help protect my business from tax scams?

Yes, antivirus software, secure communication channels, and data encryption can enhance your business’s protection against tax scams.

What legal consequences might my business face if we fall victim to a tax scam?

Your business could face penalties, potential criminal charges, and reputation damage. Prevention is key to avoiding these legal troubles.

How can I educate my employees about tax scams?

Consider holding training sessions and providing resources to help your employees recognise the signs of tax scams. Vigilance is a collective effort.

How can I rebuild trust with clients if my business falls victim to a tax scam?

Rebuilding trust requires open communication, transparency, and a commitment to rectify any issues. Clients appreciate honesty and proactive solutions.

Do you have any questions? Contact us today.

Do you have any questions? Contact us today.