CRA alerts tax preparers to new E-file scam

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This article was published 18/02/2025 (252 days ago), so information in it may no longer be current.

A Niverville couple were unaware they were victims of a tax scam until the Canada Revenue Agency reached out to them.

Danielle Jackson said it wasn’t until the agency contacted them that she and her husband, who asked not to be named, learned somebody had taken his name to create a fake Ontario driver’s licence. The fraudster used the licence to get a home-based tax preparation company in Markham, Ont., to go into his tax account to change his address on Jan. 28.

“(The agency) wanted to know if my husband was authorizing this company to make these changes and my husband said no,” she said. “(The fraudster) changed everything on his account.”

She said they could have got her husband’s tax refund, disability and GST credit and received access to their son’s information from several years ago when he was a dependent.

Jackson said the fraudster, who has her husband’s social insurance number, could have changed their preference for a tax refund in the mail to direct deposit to a financial institution.

“So now we’ll have to protect our identity because of this.”

“It all took less than 10 minutes. It is mind-blowing.”– Danielle Jackson reacting to how quickly her husband’s identity was stolen and used in a tax scam

Jackson said the tax preparation company, Dynamont Services, didn’t deal with the fraudster in person. The transaction was conducted through an exchange of emails.

“It all took less than 10 minutes,” she said. “It is mind-blowing.

RCMP are investigating the incident.

Last fall, the CBC reported that senior officials at the tax agency were worried its fraud-detection capability had gaps that allowed millions of dollars in bogus refunds to be sent out.

A report by The Fifth Estate/Radio-Canada, said sources told them senior managers at the agency said the most glaring weakness is that scammers have been able to hack into taxpayer accounts by pretending to be tax preparers or accountants.

Jackson said she initially checked all of their bank accounts and credit cards, and found nothing amiss, but in recent days after signing up with a credit check service, she has found someone has unsuccessfully tried to get credit cards in her husband’s name.

No one from Dynamont Services responded to the Free Press. The firm’s website says they have more than five years of experience in tax and insurance services.

CRA spokesperson Benoit Sabourin wouldn’t talk about the couple’s situation, but said tax preparers have to make sure their client is legit.

“An E-filer must deal with their clients and take proper care to validate the identity of their clients. Failure to do so may result in a suspension of E-file privileges.”– CRA spokesperson Benoit Sabourin

“An E-filer must deal with their clients and take proper care to validate the identity of their clients,” Sabourin said. “Failure to do so may result in a suspension of E-file privileges.”

Sabourin said when the agency is notified about “suspicious activity,” it “acts quickly and uses every tool at its disposal to stop any further activity and recover any money fraudulently or illegally obtained.”

Protecting taxpayer information is of the utmost importance, the agency said.

RCMP Const. Ricky Perkins, an investigator with the cyber and financial crime unit, said he doesn’t know what happened in this incident, but many of these incidents begin either when a tax preparer’s computer system gets hacked or there is someone at the firm who sells personal information to the black market.

“Something like this is beyond the control of any individual,” Perkins said.

As for advice, Perkins said people with CRA accounts should check them.

“People should log in to their accounts and see if everything is OK,” he said. “They don’t have to go into them all the time, but it shouldn’t just be at tax time. These frauds are out there.”

kevin.rollason@freepress.mb.ca