Hundreds of millions of dollars are being investigated by the Australian Taxation Office (ATO) in response to fraud involving fake businesses to claim false refunds. 

Following a recent spike in suspicious claims, the ATO has revealed a concerning amount of people are attempting to claim undeserved funds through fake businesses, urging people to come forward before tougher action is taken. 

The ATO, through Operation Protego, is investigating around $850 million in potentially fraudulent payments made to around 40,000 individuals, with the average amount fraudulently claimed being $20,000.

The ATO say they are working with financial institutions, who have frozen suspected fraudulent amounts in bank accounts, and have been able to stop many more attempted frauds in their tracks.

The latest fraud involves offenders inventing fake businesses and lodging Australian Business Number (ABN) applications, many in their own names, before submitting fictitious Business Activity Statements in an attempt to gain a false GST refund.

ATO Deputy Commissioner and Chief of the Serious Financial Crime Taskforce Will Day said information on how to attempt the fraud has been shared online through social media platforms. 

“We are working with social media platforms to help remove content promoting this fraud, but if you see something that sounds too good to be true, it probably is,” Mr Day said. 

Amazingly, a large number of the people lodging ABN applications for their fraudulent businesses have used their own names for authenticity, making identifying some much easier than others. 

“The people who have participated in this fraud are not anonymous. We know who they are, and we will be taking action,” Mr Day said. 

For the innocent, the spike in fraudulent activity could mean that legitimate taxpayers are forced to take extra steps following an increase in controls to remove and identify fraud. 

Mr Day said that not all fraudulent ‘business’ owners are completely guilty. 

“People who have participated in this fraud may have unwittingly followed advice they have read online, claiming to help access a loan from the ATO, or receive other financial government support such as a disaster payment,” Mr Day said. 

“However, for others there was nothing accidental or unintentional about setting up a fake business in their own name and seeking an unearned refund,” he said.

The ATO is reminding the community that the ATO does not offer loans or administer government disaster payments. 

If you have given your myGov details to a criminal the ATO can assist you to protect your identity from being used to commit further crimes, including further tax crime in your name. For any matters where you believe your identity has been compromised, phone the ATO on 1800 467 033 for assistance.