On the second morning of school holidays, principal Michelle Wilson was just starting to wind down after a busy term when she received a phone call that would lead to a "nightmare" two hours.

Key points: More than 800 Australians were fleeced of a total of $3 million by ATO scams last year

More than 800 Australians were fleeced of a total of $3 million by ATO scams last year Reports of ATO scam calls rose by 900 per cent in late 2018

Reports of ATO scam calls rose by 900 per cent in late 2018 The rise followed a joint Canadian-Indian operation to shut down scam call centres targeting Canadians

Ms Wilson, from Buninyong in central Victoria, had been due to meet her accountant to sort out this year's tax return, and the caller told her he was from the Australian Taxation Office (ATO).

The man said an audit had shown she was $8,000 in arrears, and the tax office had been trying to contact her by registered mail, which he said she had ignored.

"He started to say that in recent years I had overclaimed on my tax refund and that in an audit of tax refunds, mine had come out and I owed the ATO money," Ms Wilson said.

He knew her name, occupation and tax file number and she had seen media reporting that the tax office would be targeting her profession this year.

But she was still sceptical, so she told the caller her accountant — who she named — had not raised any issues with her.

"He rang the accountant and there was a three-way conference," she said.

A person claiming to be a staff member from the accountant's office came onto the line and the real number for Ms Wilson's accountant was displayed on her phone during the call.

"From then on I wasn't allowed to hang up the phone and I had to go and access a partial payment," she said.

"They said when it became a formal court matter it would be $97,000 and you'd lose your house.

"They said: 'You're a government employee, do you want this in the media?'."

The phone call lasted for two hours, before she paid them a requested $1,500 in the form of a Google Play card.

"I pulled over on the road at one stage and they said: 'What are you doing? We can see where you are on Google maps'," she said.

"It took me too long to twig. I think if there'd been another adult in the house I probably would have twigged.

"I just got consumed."

Record number of scam calls

Ms Wilson is one of hundreds of Australians taken in by dodgy phone calls demanding payment for bogus tax debts, with a record number of more than 800 Australians fleeced of a total of $3 million in 2018 alone.

Internal tax office documents, obtained using Freedom of Information laws, noted that a "holistic" approach to tackling the problem was needed, but said authorities were hamstrung because call centres were based overseas.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 38 seconds 38 s A robocall warns tax-payers they are about to be arrested

But they also acknowledged there had been a significant rise in calls to Australia, after India and Canada worked together to shut down call centres targeting Canadians in October last year.

According to consumer watchdog the ACCC, notifications of the ATO impersonation scam "rose by 900 per cent in late 2018".

ATO assistant commissioner Karen Foat said the spike was temporary.

"We saw a huge spike in scams being reported. In November alone, we saw 37,000 scams being reported, and over $1 million was paid out to scammers in that month alone," she said.

"We have seen it reduced back down again, but we still had over 16,000 reports of scams this year, and people have paid out more than $400,000 to scammers this year since January."

But Ms Foat said the ATO had recently referred the issue to the Serious Financial Crime Taskforce (SFCT) to investigate.

"Having the issue referred … is a real opportunity to work right across government to bring a whole range of fields of expertise together to more effectively combat scams into the future," she said.

"The taskforce looks at a range of threats to the Australian tax and superannuation system and so … they have determined that this is a priority area, that scams are an important and significant threat to the Australian tax and super system.

"You only need to have a look at the amount of people that were affected by this last year and the amount of money."

The conference call that makes you believe

After making the partial payment of $1,500 to the scammers, Ms Wilson walked into her accountant's office.

The caller was still insisting she could not hang up.

"That's when I realised," she said.

The next day, she could not believe that she — a professional woman used to running a school — had been fooled by the scammers.

"The next morning I thought, 'I cannot believe what that last 24 hours was like'," she said.

"Was that a nightmare?

"I cannot believe that I got taken in. I can't believe that's what happened to me and that's been my experience."

Ms Wilson said the caller slowly overcame her doubts with the bits of information he knew, before she was finally convinced when her accountant's number showed on her phone screen.

It is a tactic known as "spoofing", which the ATO identified as a serious issue it was trying to address by having thousands of calls blocked.

The scammers use commonly available software to falsely project legitimate Australian numbers on caller ID and call logs, so they can pretend to be ATO officers or third parties.

The scammers warn the recipient they have to pay a fake tax debt or face arrest, deportation or the freezing of assets, just as they did to Ms Wilson.

"If the recipient doubts authenticity, they offer to conference call in their tax agent or law enforcement agent (LEA) to substantiate the debt or arrest warrant," the documents said.

"A second scammer will be conferenced in and a second spoofed number will be projected on caller ID of either the agent or local LEA.

"Intelligence indicates the client discloses the name of their agent to the scammer rather than the scammer proactively holding this."

The ATO documents showed in one day alone, Optus — the phone carrier used by the ATO — had to block 55,000 calls using a spoofed ATO number.

"One of our biggest tips for people is if it's the ATO calling, the number will not come up on your caller ID, so that's one to watch out for," Ms Foat said.

Beware of scammers at tax time

Scammers also use email and "tend to coincide with key tax time dates and have relevant content for the period, for example, quarterly BAS statement emails and tax lodgement emails at tax time", the documents said.

"They continue to target taxpayer information such as credit cards, tax file numbers (TFNs) and personally identifiable information in an attempt to either extort money or steal taxpayer identities."

The documents also stated many email scams "perfectly replicated" the tax office's "brand, wording and timing".

"We do believe that email and SMS scams may be as prevalent as phone scams," the documents said.

Ms Foat said despite the increased sophistication of scammers, the first call was still often a robocall, asking taxpayers to call the person back about a debt.