For most Canadians, interactions with the Canada Revenue Agency (CRA) are few and far between. In the vast majority of cases, taxpayers file a tax return each spring and either pay any tax amount owed or (in most cases) receive a refund and do not hear from or have reason to contact the Agency again until the next tax filing season. However, especially during tax season, and for the few months after the general filing deadline of April 30, there are a number of additional (legitimate) reasons why the CRA might get in touch with individual taxpayers.
Unexpected communications of any kind from the tax authorities are generally stressful for taxpayers, who often fear the worst. Such anxiety often leads taxpayers to respond quickly to whatever request is being made, but that’s not the right response. Any unsolicited communication from the CRA should first prompt the taxpayer to verify that such communication is, in fact, legitimate and not part of a fraud or scam to part the taxpayer from their money.
Such frauds and scams aren’t new, but they are becoming both more numerous (there are currently warnings about 18 separate tax and benefit scams listed on the Agency’s website, and there are undoubtedly more which have not yet come to light) and more successful. The reasons why lie, for the most part, in changes in technology and in how we now communicate on personal, business, and tax matters. Most Canadians now carry out most of their communications using technology that didn’t exist a generation or two ago. The sheer volume of such communications, and especially the fact that providing a more or less instant response has become the norm, has made scams and frauds much easier to carry out. A fraudster who sends out thousands of fraudulent text messages asking the recipient to click on a link which then provides access to that individual’s personal or banking information needs to succeed in only a few instances in order to make the fraud profitable. Adding to the risk is the fact that the CRA, as part of its move toward online and electronic communication with taxpayers, now utilizes nearly every available form of e-communication. The CRA contacts taxpayers by phone call, automated voice message, letter, text message, email, and online (through its website service My Account). About the only forms of communication that the CRA doesn’t use are social media sites like What’sApp and Facebook Messenger. And now, Generative AI has enhanced the ability of even unsophisticated scammers to produce communications purportedly from the CRA which are harder and harder to distinguish from the real thing.
It’s clear, from all of this, that the first response to any communication received from the CRA should be to NOT respond until that communication can be verified as authentic. And while that’s not always easy to do, there are practices which, if followed, can minimize the risk – and other practices which should always be avoided.
No matter the form of communication, or how urgent or time-sensitive that communication claims to be, taxpayers should NEVER:
- Provide or share any personal or financial information, whether over the phone, by text, by email, or on a website, to any person or organization claiming to be from the CRA (even if call display on a phone call indicates that the person is calling from a number belonging to the Agency, as such phone numbers can be spoofed). Taxpayers who receive an unsolicited phone call from someone claiming to be from the CRA can ask the caller for their name, office location, and a number at which they can be reached. It’s then possible to use a service on the CRA website to verify whether or not that callback number is, in fact, one used by the CRA. That service, called Verify a CRA number, can be found on the Agency’s website at https://www.canada.ca/en/revenue-agency/corporate/scams-fraud/verify-cra-contact.html. If the caller refuses to provide a name, office location, and callback number, it’s not the CRA calling.
- Click on any link (whether to a form or a website) contained in a text message or unsolicited email. While the CRA does use texts and emails to communicate, it does so only for very specific purposes. The CRA will send a text to a taxpayer only as part of its multi-factor authentication service used when the taxpayer is logging into their CRA account, and then only to provide a six-digit one-time numeric code to be entered on the website. Any other kind of text is not from the CRA. Similarly, the Agency does send emails to taxpayers, but in only two specific circumstances: where the taxpayer has registered for email notifications and has a new message to view in their CRA online accounts, or where the taxpayer has asked, during a previous meeting or call with a CRA representative, that a CRA link to a form or publication be sent to the taxpayer by email.
Tax scams and frauds are generally successful for two reasons. First, the communications employed to carry out such scams and frauds are structured to be very similar to legitimate communications which could very well have come from the CRA. For instance, the CRA does contact taxpayers, as part of its return verification program, to request that the taxpayer provide proof of claims made on their return – for example, verification of amounts paid for childcare expenses. A taxpayer who receives a text message or email that looks legitimate and requests that they click on a link to confirm such amounts paid isn’t likely to jump first to the conclusion that the communication is fraudulent. Second, fraudulent communications very often inform the taxpayer that they are owed a tax refund by the CRA or are eligible for payment of a new government benefit or tax credit amount. It’s human nature to welcome receipt of unexpected income, and our tax and benefit system is sufficiently complex that most individuals wouldn’t be surprised to hear that they were eligible for refunds, benefits, or tax credits of which they were unaware, and don’t think to question it. Conversely, such fraudulent communications may tell the taxpayer that they owe money to the tax authorities and that significant interest and penalty charges will accrue unless and until payment in full is made. Often, the message includes sufficient dire warnings of the negative financial consequences of such debts (like garnishment of wages, damage to one’s credit rating, or even criminal charges) as to intimidate the taxpayer into making a quick payment, without taking the time to verify the authenticity of the request.
The best defence against becoming a victim of such tax scams and frauds is two-fold: first, never disclose personal or financial information in response to a communication of any kind which purports to be from the CRA, and never click on any link provided in a text or unsolicited email communication received (ostensibly) from the Agency. Where an unsolicited phone call is received, the taxpayer should follow the steps outlined above to verify the authenticity of the call and, if still uncertain, should call the CRA directly (using the Individual Income Tax Enquires line at 1-800 959-8281) to determine whether the call was, in fact, from the Agency. Where any communication is received containing a website link or address, the CRA’s advice is that the recipient should look up the official web address and then type it directly into a browser, and never click on the link. The CRA points out that many such links include a website address which is strikingly similar to real government website addresses, differing by only one or two characters, and leading the recipient to conclude that the communication is legitimate, when it is not.
The other defence against tax scams and frauds is to be aware of what the CRA does and does not do when communicating with taxpayers.
The CRA will not:
- Send refunds or payments by e-transfer or text message;
- Provide or accept payments by cryptocurrencies;
- Demand or pressure immediate payment by:
- Interac® e-transfer,
- Cryptocurrencies,
- Prepaid credit cards,
- Gift cards from any type of retailer;
- Threaten to deport or arrest you, or put you in prison;
- Use aggressive or threatening language;
- Set up an in-person meeting in a public location to collect a payment;
- Charge a fee to speak with a call centre agent;
- Ask for personal or financial information in a voicemail or email.
Any communication which includes any of these requests, threats, or actions is, by definition, fraudulent and should be ignored and/or deleted, without replying or clicking on any link.
Given all of the above, taxpayers can legitimately feel that they are at a significant disadvantage when it comes to not falling prey to a tax scam or fraud. However, avoiding that result is made much easier by remembering that there is NO legitimate communication from the CRA which requires a response within minutes or hours or even days. There is always time and opportunity to verify the source and legitimacy of any communication received, regardless of the method of communication. When money is lost to a tax scam or fraud, it is rarely recovered; avoiding immediate responses and taking the time to verify the authenticity of any communication which claims to be from the CRA will go a long way to ensure that the taxpayer doesn’t find themself in that unhappy position.
The CRA provides detailed information on its website on how to handle phone calls claiming to be from the Agency and on recognizing and avoiding tax scams and frauds. That information can be found at https://www.canada.ca/en/revenue-agency/corporate/scams-fraud/verify-cra-contact.html and at https://www.canada.ca/en/revenue-agency/corporate/scams-fraud/recognize-scam.html.
If you would like help with dealing with the CRA or would like to know more about taxable benefits, please feel free to call us at (905) 305-9722 or email us at info@eigenmachtcrackower.com and we will help you out!
