An Ottawa lawyer says the Canada Revenue Agency paid out a bogus $30,000 tax return even though he warned them — twice — that an identity thief had filed it in his name.

The lawyer said he learned on April 11 that someone had electronically filed a tax return using his identity and social insurance number nine days earlier.

Distroscale

The fraudster’s tax return claimed a maximum RRSP deduction, which generated a refund of the lawyer’s 2018 quarterly tax installments. His direct deposit information had also been changed to a new Scotiabank account in Montreal.

The return had not yet been processed when the lawyer called the CRA on April 12 to report the problem.

He explained the situation to a CRA agent, who assured him that the fraudulent return would not be paid out. While he was on hold with the agent — the call took more than an hour — his cellphone died. The lawyer called back, explained the entire situation to a second agent, and was again reassured that the fraudulent tax return would not be processed.

Story continues below This advertisement has not loaded yet, but your article continues below.

Six days later, the CRA issued a $30,000 tax refund to the fraudster after processing the return.

“I was, to say the least, pretty darned shocked when they told me they’d gone ahead and paid the money out,” said the 65-year-old lawyer, who spoke to this newspaper on the condition that his name not be published.

“It’s such a big organization: I guess it’s a case of the left hand not knowing what the right hand is doing,” he said. “They were pretty embarrassed about it.”

The lawyer was told that a “failure of communication” between different branches of the CRA had allowed the fraudulent return to be processed.

In late April, he said, a CRA agent informed him that the $30,000 had been recovered by the tax agency.

CRA spokesman Etienne Biram said the agency could not comment on the case — or on any investigation that flowed from it — because of privacy rules in the Income Tax Act.

“T he CRA is committed to combatting identify theft and has taken steps to further protect taxpayers from this type of fraud,” Biram said.

The agency’s call centre employees have been reminded to remain vigilant against would-be fraudsters, he said, and the CRA is examining new procedures to further safeguard taxpayers.

Biram said the CRA “strongly recommends” that all taxpayers sign up for security alerts online. The alerts, issued through a CRA “ My Account ,” informs a taxpayer when an address or direct deposit information has been changed.

The Ottawa lawyer is the second local resident to describe in recent weeks how a fraudster stole their identities and used them to file phoney tax returns.

Story continues below This advertisement has not loaded yet, but your article continues below.

Both individuals formerly used Raymond Chabot Grant Thornton as their accountants.

A spokeswoman for Raymond Chabot Grant Thornton has said the firm is working with the CRA to investigate the dozen cases of identity theft-related tax fraud experienced by its clients. An independent investigator found no data security breaches at the firm.

The CRA’s Biram said taxpayers are not liable in cases where a tax agency investigation confirms that a refund was issued based on the filing of a fraudulent return.

The Ottawa lawyer said he wants to see the person responsible for his identity theft arrested and prosecuted. The same fraud artist sought to open an online bank account in his name, and redirect his Canada Pension Plan payments.

“Somebody is out there actively trying to see if they can turn me upside down, and shake out every nickel they can find,” he said.

The lawyer discovered that his CPP payment was redirected in April when the fraudster changed his bank account information online with the tax agency. The identity thief checked a box online that allowed the CRA to share his new banking information with Service Canada, which administers CPP accounts.

“Fortunately, I caught it before this had gone too far,” he said.

Service Canada has reimbursed him for the missed payment.

ALSO IN THE NEWS