Protect Yourself and Your Parents from Tax Fraud

Tax Planning

Keep an eye out for warning signs and reduce your vulnerability with a few simple tips.

Identity thieves are stealing other people’s personal information and using it to file tax returns. And it’s become an even more prevalent problem in wake of recent COVID-19 relief provisions – according to the Federal Trade Commission, identity theft reports more than doubled from about 650,000 in 2019 to 1.4 million in 2020.

These criminals often file fraudulent tax returns as early as possible in an effort to have the bogus return processed before you can file your own legitimate return. You may therefore be unaware you have been victimized until you attempt to file your taxes.

These scammers are stealing money from the government while also hindering your ability to file a genuine tax return, not to mention creating undue stress as you take efforts to rectify the situation. It is important to be aware of this scheme and take steps to prevent this from happening to you and your loved ones.

Prevention tips

There are several ways to reduce your family’s chances of becoming a victim of tax return identity fraud:

• Keep your Social Insurance Number, as well as other personal information, stored in a secure place (i.e., not your wallet), and avoid mentioning it on the phone or online unless absolutely necessary
• Be sure to check your credit report regularly, looking for anything suspicious or irregular
• Be aware that the CRA does not routinely email, make phone calls or communicate through social media. Any communication from those sources is likely to be fraudulent
• Assume that unexpected calls from the CRA urging you to give or confirm financial information are fraudulent.

Warning signs

Be on the lookout for CRA notices that appear to be inaccurate. These may include notices that more than one tax return was filed with your Social Insurance Number, that you owe an additional tax that appears to be inappropriate or that you’ve received wages from an unknown employer.

CRA FAQs

Will the CRA contact me via email? The CRA will never initiate contact with you via e-mail, text messages or social media with a request for personal or financial data. Be extremely careful with any unsolicited email that claims to be from the CRA.

What should I do if I receive an email or text message claiming to be from the CRA or another tax service that asks for sensitive information? Do not reply. Do not click on any links or download any attachments.

Raymond James Ltd., member of the Canadian Investor Protection Fund.