You have probably heard all about identity theft. But did you know that this practice can also be used to fraudulently submit your tax returns and steal your refund?
We find out how criminals can use your personal details to achieve this, and we consider some expert advice on how to prevent it from happening.
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What are tax refund scams?
Phindile Nakin, from the Johannesburg BDO tax team, says that with so many phishing scams out there, your tax refund is as much at risk of being stolen as the money in your bank account.
“There is always a possibility of fraud when it comes to your personal and financial information, as this may fall into the wrong hands,” says Nakin.
There are two ways in which criminals actively steal personal and private information for tax fraud:
- Phishing via email or phone. This is when criminals masquerade as SARS representatives and send emails requesting confidential information from taxpayers - or request the same by phone. SARS will never ask for your eFiling details, such as your login details, or personal information, via these methods.
- Fake SARS auditors target businesses: This is when a criminal contacts a business and falsely informs them that they are under audit by SARS. They then submit an “official letter” to the business urging them to comply with the auditor.
If your personal information is stolen by a criminal, or your business’s private information is stolen, criminals will be able to fraudulently file a tax return on your behalf and cash in a refund that’s due to you or your business.
READ MORE: 6 Clever ways to spend your tax refund
How to protect your tax return
Nakin believes that the best way to minimise your risk of tax refund fraud is to:
- Make sure your contact details are updated and correct at SARS. This may include your email address, cell phone number, and physical address.
- Whenever you receive correspondence from SARS, you should know and understand what it relates to before you act on it. Always run it by your tax practitioner, as it could be a phishing email, SMS, or call.
- Always – absolutely always – protect your personal information, such as your banking details, and only share this with your trusted tax practitioner. Shred all redundant documents containing this information.
If you are concerned about fraudulent behaviour, you need to get in touch with SARS and report suspicious activity to them directly. This article will guide you through the process.