Accountants in western Sydney, where the fraud went viral in mid-2021, said new examples continued to show up as clients filed their tax returns, which shows that the fraud continues.

From late 2020, banks noticed a wave of suspicious transactions where customers on social benefits had received large business payments – in some cases more than $100,000 – from the Tax Office.

The banks froze the accounts and notified the Tax Office about the transactions, but became increasingly frustrated when the Tax Office took no action against the accounts.

How the scam worked

The Tax Office’s position is that it could not tell the banks what it was doing because of taxpayer secrecy laws. However, there was disagreement within the Tax Office over which section would handle the matter.

From mid-2021, the fraud exploded as social media influencers on TikTok explained to their followers how to obtain a “loan” from the government.

The scam involved people obtaining an Australian Business Number or ABN, then using their MyGov acc