Tax scams are on the rise, so protect yourself with good information. Here’s how to know if a person claiming to be collecting on a tax bill from the Canada Revenue Agency (CRA) is on the level, or a fraudster.
For years, Personal Tax Advisors has warned clients to disregard personal emails about tax refunds purporting to be from the Canada Revenue Agency (CRA). CRA never sends emails about your taxes, and any email that refers to your specific income tax account is always a scam.
However it appears that scammers are stepping up their game from simple phishing, and have begun calling people, threatening them, and sometimes – terrifyingly – showing up personally.
How to Tell the Difference Between the CRA and a Fraudster
As mentioned, anyone who emails you about your tax bill is probably phishing. By contrast, CRA does sometimes call, but usually only after they’ve sent a good old fashioned letter or three.
If a phone call is the first you’ve heard of this tax bill (and assuming you haven’t changed mailing addresses since you filed your taxes), be suspicious. The first contact you receive regarding a tax bill will always be by letter: typically a Notice of Assessment followed by one or more Statements of Account. Only then might the CRA decide to try you by phone.
A genuine CRA agent who contacts you should be able to produce the last three digits of your SIN on request. The amount they claim you owe should be exactly, or very close to, whatever your last Statement of Account or Notice of Assessment said. They should not become aggressive, and should either accept your word as to when you plan to pay, or offer you a payment plan spanning several months.
The only acceptable ways to pay your taxes are directly through your bank or via a cheque made out to the Receiver General. No CRA agent should request or accept any other form of payment.
Never pay cash, and never make the cheque out to any other person or organization but the Receiver General of Canada.
CRA is Bigger than Intimidation
Even the most serious tax trouble is expressed almost exclusively on paper*, not in face-to-face (or even phone) contact. You could owe half the gross national product of Guam and still NO ACTUAL CRA AGENT WOULD EVER SHOW UP PERSONALLY TO COLLECT.
Remember that CRA is part of the government, and when they decide to play hardball, they don’t have to ask for money anymore. Asking is for chumps.
No, instead they’ll go ahead and freeze your bank accounts (after a series of polite warning notices, of course). They’ll contact your employer and siphon it directly off your paycheque. They’ll force your clients to divert payments to them. They’ll let everyone who matters know about your tax delinquency. Oh, you’ll know when the CRA is really and truly after you.
Run-of-the-mill fraudsters can yell and threaten all they like; but the CRA knows what it means to be scary.
* Ironically, most tax trouble can also be solved with paper – the right forms, the right information, the right letter – so give us a call if you’ve received a Very Scary Letter from CRA and we can help.