Taxpayers in Greece might be receiving red flag notices after thousands of tax declarations have been reviewed by the country’s Independent Authority for Public Revenue (IAPR).

This new research proved that even the new electronic system has loopholes, often abused by accountants promising larges refunds to their clients by claiming expenses up to a certain limit they know won’t trigger an audit.

The number of citizens that amended their initial reports in order to tax evade is reportedly well in the thousands, a fraud that has seen large tax returns be allocated to claimants.

According to an announcement from SDOE, Greece’s financial crimes unit, a significant number of accountants and possibly taxpayers had attempted to cheat the state out of a total of five million euros by claiming fake donations toward servicing the Greek debt or political parties. In this instance, claimants could receive up to a 20 per cent tax deduction through refunds which in some cases are estimated to have reached 45,000 euros.

IAPR and SDOE have agreed to start audits investigating individuals who have reportedly secured the largest refunds in the last five years. If a claimant is flagged they will summoned by their tax office and expected to present the original documents verifying all the donations claimed by their accountants.

“The scam was first discovered two months ago and authorities immediately changed the software for submitting declarations so that large refunds could not be claimed and the cases are sent to tax offices for an audit,” IAPR head Giorgos Pitsilis told Greece’s Real FM radio confirming that authorities have flagged about 170 suspicious tax statements.

“It is not clear whether those who falsely claimed a large tax refund were aware of it, as authorities suspect that in some cases their accountant may have filed the amended declaration without notifying them,” he added admitting that in some cased the bank accounts provided did not even belong to the taxpayers who had filed for a tax refund.

On this note, IAPR and SDOE are cooperating with banks to come up with a system linking all IBANs with the claimants’ tax identification numbers.