Liu & Associates would like to alert clients and the community to a serious incident of tax filing fraud that was recently discovered.
While preparing a client’s personal income tax return, we were informed by the CRA that the return had already been filed, and that a substantial refund had already been issued.
This immediately raised concerns.
The client had not filed their return, and the information on record did not match the client’s actual tax information. Upon further investigation, it became clear that the client’s identity had been stolen. Essential personal information, including the client’s SIN and address, had been used to fraudulently file a tax return.
The fraudulent return included a fake T4 slip showing a large amount of tax deducted at source. As a result, the return generated a significant refund. The refund was processed and paid out before the fraud was detected. It is believed the perpetrator may have used an instant refund service to access the funds quickly.
The matter is now under investigation by both the CRA and the client.
Why This Matters
Tax filing fraud is becoming increasingly sophisticated. When personal information is compromised, fraudsters can file false returns early in the tax season to claim refunds before the legitimate taxpayer files.
In situations like this, resolving the issue can be time-consuming and stressful. It may require formal reporting, identity verification, and ongoing communication with the CRA.
If You Have Concerns
If you receive notice that your tax return has already been filed when you did not submit it, or if something about your CRA account does not seem right, it is important to act quickly. We are here to help.
For any questions or concerns about this situation or other tax-related matters, please contact Liu & Associates.