Internet Scams Targeting the Elderly

Q. My Aunt Julie was recently the victim of tax-related fraud. She explained what happened and I knew right away that it was a scam targeting the elderly. Someone claiming to be from the IRS called her and told her that she owed back taxes and threatened that, unless funds were wired immediately, legal action would be taken or she would be arrested. The person was very convincing and aggressive, and “IRS” even showed up on her caller ID. The con artist even knew the last four digits of her Social Security number!

Julie is a trusting person, and it seemed legitimate to her, so she wired the scammer several thousand dollars, only to find out later that she was duped. I felt terrible when she told me what happened, and want to protect others. What are some of the most prevalent scams during tax time, how can people protect themselves, and how do the scammers get people’s names and information? Thanks for your help!

A. I am sorry to hear that your aunt fell prey to a con that AARP Fraud Watch Network said is their “number one reported fraud right now.” It’s tax time, and the scammers targeting the elderly are out in full force. For those who get a call from someone claiming to be with the IRS, hang up. The real IRS doesn’t call you up to ask for money. The real IRS opens communications with a taxpayer only via the U.S. Postal Service. If you’re ever in doubt about an IRS matter, call the IRS directly at 800-829-1040. You may be on hold for a couple of hours, but that’s better than being scammed out of your hard-earned dollars.

Every year around tax time, the IRS releases the “Dirty Dozen” scam list. Taxpayers are encouraged to review the list in a special section on IRS.gov and be on the lookout for these con games throughout the year. Here are highlights from this year’s dirty dozen, including a link to the IRS press release about each one:

Phishing: Taxpayers should be alert to potential fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about a bill or tax refund (or by phone, as mentioned previously). Don’t click on an email claiming to be from the IRS. Be wary of emails and websites that may be nothing more than scams to steal personal information. (IR-2018-39)

Phone Scams: Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as con artists threaten taxpayers with police arrest, deportation, and license revocation, among other things. (IR-2018-40)

Identity Theft: Taxpayers should be alert to tactics aimed at stealing their identities, not just during the tax filing season, but all year long. The IRS, working in the Security Summit partnership with the states and the tax industry, has made major improvements in detecting tax return related identity theft during the last two years, but taxpayers should still be vigilant. The IRS continues to aggressively pursue criminals that file fraudulent tax returns using someone else’s Social Security number. (IR-2018-42)

Return Preparer Fraud: Be on the lookout for unscrupulous tax return preparers. The vast majority of tax professionals provide honest, high-quality service, but there are some dishonest preparers who operate each filing season to scam clients, perpetuating refund fraud, identity theft, and other scams that hurt taxpayers. (IR-2018-45)

Fake Charities: Groups masquerading as charitable organizations solicit donations from unsuspecting contributors. Be wary of charities with names similar to familiar or nationally-known organizations. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate charities. IRS.gov has tools that taxpayers can use to check out the status of charitable organizations. (IR-2018-47). Any charity you are considering donating to should also be looked up on charitynavigator.org.

Inflated Refund Claims: Taxpayers should take note of anyone promising inflated tax refunds. Those preparers who ask clients to sign a blank return, promise a big refund before looking at taxpayer records, or charge fees based on a percentage of the refund are probably up to no good. To find victims, fraudsters may use flyers, phony storefronts, or word of mouth via community groups where trust is high. (IR-2018-48)

Falsifying Income to Claim Credits: Con artists may convince unsuspecting taxpayers to invent income to erroneously qualify for tax credits, such as the Earned Income Tax Credit. Taxpayers should file the most accurate tax return possible because they are legally responsible for what is on their return, even if someone else prepared it. This scam can lead to taxpayers facing large bills to pay back taxes, interest, and penalties. (IR-2018-55)

How they Get Your Name

Ever wonder how scammers get your phone number, address, or email? Is it random or is there science to the targeting? Experts say it’s both.

AARP Fraud Watch Network Ambassador Frank W. Abagnale, a long time FBI consultant whose early life as a con artist was portrayed in the film “Catch Me If You Can,” equates it with playing roulette. Sometimes your unlucky number just comes up. Besides bad luck, below are three additional ways in which scammers can get your information:

  1. Data purchases. Scammers buy phone numbers from companies that sell data. They use the same methods legitimate marketing companies do, but for nefarious purposes.
  2. Con artists network. If you’ve been a victim of a fraud or scam, you’re put on a “sucker list”. The lists are bought, sold, traded and stolen among scammers because they’re perceived as potential gold mines. Scammers will usually target the victims with a ‘recovery’ or ‘reload’ scam. They pretend to be from a consumer group or law enforcement agency and trick you into thinking they’ll help get your money back — for a fee.
  3. Volunteered info. This is personal info you willingly divulge by entering giveaways and sweepstakes, or when filling out surveys. Scammers use all this to create profiles for who they want to target. Often they’ll target older adults, who they perceive as holding the majority of wealth in this country and being the most susceptible to manipulation.

How to Report Tax-Related Schemes, Scams, Identity Theft and Fraud

Have you been the victim of tax-related fraud? To report tax-related illegal activities, refer to this IRS chart explaining the types of activity and the appropriate forms or other methods to use. You should also report instances of IRS-related phishing attempts and fraud to the Treasury Inspector General for Tax Administration at 800-366-4484.

Taxpayers who experience tax-related identity theft should also file a Form 14039, Identity Theft Affidavit.

Additional Scam-Related Information:

IRS YouTube Videos on Tax Scams:

Planning to Protect Loved Ones

Protecting seniors from scams is very important, which is why we continually share information about current scams and how you can protect yourself. It is also very important to plan for your future and for your loved ones. If you have not done Incapacity Planning, Estate Planning, or Long-Term Care Planning, or if you have a loved one who is nearing the need for long-term care or already receiving long- term care, please contact us to make an appointment for a no-cost introductory consultation.

Fairfax Elder Law Attorney: 703-691-1888

Fredericksburg Elder Law Attorney: 540-479-1435

Rockville Elder Law Attorney: 301-519-8041

DC Elder Law Attorney: 202-587-2797

 

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