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Tax

Threats of arrest make CRA scam calls easy to identify

A phone scam claiming to represent the Canada Revenue Agency (CRA) is making the rounds and has already duped a number of taxpayers across the country, but as Canadian tax lawyer David J. Rotfleisch tells AdvocateDaily.com, the real taxman will not call and threaten to arrest anyone for unpaid taxes.

As Rotfleisch, founding tax lawyer with Rotfleisch & Samulovitch Professional Corporation explains, his office has received the fraudulent call a number of times this year. Each time, there is a threatening voice recording alleging that the individual has not paid taxes and will be arrested.

The swindlers change tactics every few months, providing fake badge numbers and contact information, he adds. The CRA recently released transcripts of the phone scams currently targeting taxpayers.

“This is an organized crime operation probably based in India like the last one was. It is not only targeting Canada but also the U.S. and U.K. There were hundreds of arrests several years ago and the volume went down but as with any other successful business, when one player shuts down another one will open up,” says Rotfleisch.

As of mid-2018, the CBC reports, the Canadian Anti-Fraud Centre had received more than 13,000 complaints about the hoax, and 865 victims across Canada had been defrauded of just under $4 million.

Rotfleisch says it is not surprising that the scheme has been successful.

“The scam is no different than the previous ones. The payment methodology may vary but the overall operation is identical. It is successful because people are very terrified of the taxman and do not know the intricacies of how they operate. When someone gets a phone call threatening arrest for unpaid taxes many people are scared and immediately fall for the scam,” he adds.

Although the current iteration of the fraud is demanding payment in cryptocurrency, such as Bitcoin, Rotfleisch says actual cash withdrawals from bank machines have also taken place.

Rotfleisch says his office routinely receives phone calls from victims of the hoax — often people who are suspicious and take the time to do their homework.

“The scam is very easy for us to identify so we immediately advise people that the CRA does not operate in the way in which the phone call indicates and they do not arrest people for unpaid taxes.”

Indeed, in addition to never threatening to lay criminal charges or having you put in jail if you don’t pay your taxes, the CRA says it will not ask for credit card numbers, health card or passport information over the phone.

“The CRA does not threaten to arrest people for unpaid taxes. So, any call threatening arrest is clearly a hoax. Just hang up,” says Rotfleisch.

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