Everyone loves a tax refund. But the lure of money back from Inland Revenue (IR) has led some Kiwis to provide private information to scammers. All they got back was identity theft.
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Tax refund scams
Fake tax refund scams are the work of unscrupulous individuals who impersonate IR officials or private tax specialists. They call or email taxpayers with promises of a refund on taxes paid, once “necessary” information is provided. Sometimes people have been asked for a fee to cover refund costs.
In one instance, an elderly woman living alone was called with a bizarre story about IR making annual $3600 distributions to selected taxpayers because “surplus funds” had been collected over the past year. But first the imposter needed to give passport details and a postal address. Friends of the woman interceded and no information was given.
Emailed refund promises usually include a hyperlink to a fake but realistic-looking webpage where private information is asked for. This will probably include the taxpayer’s user ID and password for access to Inland Revenue’s secure online service myIR. Clicking on the link might also download a virus to the taxpayer’s computer. Both actions will give the scammer access to all information needed for identity theft. This online scam practice is called “phishing”.
Tax payment scams
Tax official impersonators also play on people’s fear of being offside with Inland Revenue.
Thousands of Kiwis have recently received threatening phone calls or voice messages from scammers who warn of investigation and possible prosecution for not meeting tax liabilities. The individuals targeted have been instructed – often aggressively – to co-operate by making an urgent payment otherwise they would face arrest.
IR has received thousands of calls and emails from people who have been harassed in this way during 2016. A spokesperson says the scammers told some people to buy iTunes cards and provide the serial numbers as payment for the “overdue tax”. He says IR knows of at least a few people being taken in by the scam.
He says Inland Revenue staff would never treat customers like the impersonators. IR never cold calls or emails New Zealand taxpayers to threaten them with imminent legal action. It also would never accept payment in the form of iTunes cards or other types of voucher.
IR generally communicates with individual taxpayers on the detail of their tax only through hard copy mail to a registered address or their myIR account. The individual logs on to myIR using their confidential user ID and password, at a time of their choosing. The spokesperson says IR never calls or emails people asking for those login details, or for them to be entered on a third party website.
Tax official impersonation is a global scourge from which New Zealand is clearly not immune.
A long investigation by the US Government has recently shed light on the scale, from large call centres in India to highly-organised bogus "tax" collectors in American cities. During October, 20 people arrested in Miami were charged with identity theft, wire fraud and impersonating officials. The US is now trying to extradite people from India.
Investigators say at least 2 million Americans have been cold called with demands to pay overdue tax and penalties or face prosecution and imprisonment. An estimated US$50 million has been stolen over three years.
The scams allegedly involve hundreds of people in call centres in the Indian city of Ahmedabad equipped with Voice Over Internet Protocol (VoIP) technology to mask their location and to enter spoof numbers on call recipients’ phone records (in the US, the numbers belong to the Internal Revenue Service). Senior citizens and immigrants have been targeted but not exclusively.
Once a targeted person responds to the Indian callers, the US-based scammers collect and launder the demanded payments. In many cases, the demand is for iTunes or other stored value cards – the use of which cannot be traced. The scenario will be familiar to some New Zealanders.