Identity theft and scams

Tax clinics and financial counsellors

Tax clinics work closely with trusted financial counsellors to provide holistic support to victims of scams, tax fraud and identity theft. Financial counsellors play a critical role in helping clients navigate complex financial situations. By collaborating with these professionals, tax clinics ensure that clients not only receive accurate tax and superannuation advice but are also supported in addressing the broader financial challenges they face.

This partnership allows for coordinated care, where financial counsellors assist with financial recovery, while tax clinic teams address tax obligations, negotiate with the ATO to try and resolve debts, rectify incorrect lodgments, and help restore access to ATO and superannuation systems. This integrated approach is particularly vital for clients impacted by scams, tax fraud and identity theft, as it provides them with the tools and support needed to regain financial control and long-term stability.

Identity theft and scams impact members of the community in many ways. Some examples seen by tax clinics include:

• GST fraud where an individual’s identity is used, often without their knowledge, to register an Australian business number (ABN) and claim fraudulent GST refunds. Victims may only become aware of the fraud when contacted by the ATO about significant debts, audit activity, or penalties associated with a business they never operated.
• Cold call scams from people posing as ATO staff offering loans, taxation grants and other forms of financial support. The caller obtains the victim’s tax file number and other identity information, accesses their ATO account through myGov with the victim still on the phone, lodges fraudulent claims and changes the bank account information to route the money directly to the scammer. The victims in these cases are very often:
  • elderly people and young people
  • people who don’t speak, read or write in English
  • people with disabilities
  • people from a migrant background.
• Identity information including contact details, tax file number and passport or other identity document information, obtained via data breaches or other forms of identity theft. This information is used to file paperwork with ASIC and sign up victims as directors of companies. The victims are then pursued by the ATO for tax debt left behind by those companies through the director penalty regime. Anyone in the community could fall victim to this type of identity theft and subsequent tax debt, through no fault of their own.

Case study: assisting a victim of tax fraud Client E was referred to a tax clinic after receiving ATO correspondence indicating they owed thousands of dollars on fraudulent claims for refunds of GST credits. Our review revealed that a false ABN had been registered in the client’s name and used to lodge multiple fictitious business activity statements (BAS), resulting in improper GST refunds being paid out. The client had no knowledge of this activity and had never run a business. Working alongside the client and financial counsellor, the clinic gathered evidence including proof of identity theft and formally advocated to the ATO for the debts to be reviewed. The clinic submitted a request for the remission of penalties and cancellation of the ABN, while also assisting the client to secure their tax file number and protect their ATO account from future misuse.

Advocacy by tax clinics

Cases involving clients who are victims of scams and identity theft are often complex and time-consuming. The burden is on taxpayers, and by extension, tax clinics, to prove they were not responsible for the debt or involved in fraudulent activity.

Establishing innocence with the ATO requires compelling documentation and a clear narrative supporting the client’s claim, which can be particularly difficult for vulnerable clients who have limited access to their records or communication channels. This process is especially challenging when the ATO pursues debts despite awareness that fraud has likely occurred, as evidenced by protective restrictions placed on affected clients’ access to ATO online services.

Further challenges arise due to the limited grounds on which the ATO can grant relief. Serious financial hardship is typically the only basis on which relief can be granted by the ATO. As a result, many tax clinic clients are unable to receive relief, even in cases where their lives have been financially destroyed by the actions of others.

Despite these obstacles, tax clinics remain committed to advocating for fair outcomes, helping victims of fraud not only clear their names but also rebuild confidence in engaging with the tax system.

Insight from a financial counsellor As a financial counsellor working with highly vulnerable clients, I have consistently found the collaborative approach with the Curtin Tax Clinic to be an invaluable asset in achieving the best possible outcomes for individuals facing complex financial challenges. Often, the issues my clients present extend beyond basic budgeting and debt management, frequently involving intricate tax matters that fall outside my area of expertise. This is where the partnership with Curtin truly shines. The collaborative approach fostered by the clinic empowers financial counsellors to provide more holistic and effective support to vulnerable clients. It ensures that even when cases present with complexities beyond our immediate expertise, we can confidently connect our clients with the right professionals to achieve the best possible outcomes. This partnership is not just about addressing tax issues; it's about providing comprehensive support that truly makes a difference in the lives of those who need it most. I wholeheartedly recommend this collaborative model to any financial counsellor working with vulnerable individuals facing intricate financial circumstances.'