What is the role of a TFN in fraud detection?

The role of a Tax File Number (TFN) in fraud detection primarily revolves around its ability to assist authorities in tracking individuals' income and preventing fraudulent claims. A TFN is a unique identifier assigned to individuals and entities for tax purposes, making it easier for tax authorities to match income reported by taxpayers against information from employers and financial institutions. This ability to cross-reference various income sources helps to ensure that all income is accurately reported and taxed accordingly.

By having a centralized number that connects the individual to their income records, tax authorities can quickly identify discrepancies or unusual patterns that may indicate fraudulent activity, such as income underreporting or false claims for benefits. This proactive approach to monitoring income helps to safeguard the integrity of the tax system and curtail potential fraud before it can affect revenue or lead to losses for the government.

While the other options describe various actions related to taxation, they do not specifically address the TFN's function in fraud detection, which is central to its purpose in the tax system.