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Tax Season Scams Targeting Seniors

Posted on March 23rd, 2016

Another tax season is upon us, and with it comes a surge of fraudulent activity. While scammers find new ways to prey on people every day, they continue to target the elderly year after year. So what are the biggest scams out there right now? And why are older adults more at risk of being conned?

Fake IRS Phone Calls
Back again this year is a nationwide ploy in which scammers make phone calls pretending to be from the IRS or the US Treasury. Upon answering, you're told that you owe back taxes and that unless money is paid immediately (with a pre-paid debit card, money order or wire transfer), legal action will be taken, including arrest, deportation, loss of business or driver's license or even grand jury indictment. Scammers are being extra sneaky by displaying "IRS" or even "AARP" on the caller ID, according to Jeff Abramo, Interim Manager of Communications & Community Outreach at AARP New Jersey.

The IRS will not initiate contact with taxpayers about tax issues via phone, text, email or social media without first sending a letter, nor would they ask for immediate payment over the phone.

Email Phishing Scheme
Fraudsters are also trying to trick taxpayers into giving up personal information to be used for identity theft or to file false tax returns for refunds. The IRS has reported seeing an approximate 400 percent surge in phishing and malware incidents so far in 2016. These scams are two-fold. The first part includes fake emails and text messages designed to look like they're from the IRS or a tax software company that phish for sensitive information related to filing status, refunds, confirming personal data and ordering transcripts. When the emails are clicked, they lead to websites designed to look official, like IRS.gov. But in reality, these sites carry malware, triggering the second part of the scam and infecting people's computers allowing access to files or tracking keystrokes to gain personal information.

The IRS urges people to not click on these emails, but instead forward the email to phishing@irs.gov.

Why the Elderly are Targeted
So why are older adults the biggest target for financial scams? According to Aging Life Care Association, research shows that aging makes one more vulnerable to being cheated. The article discusses two separate studies which report that changes in the brain due to aging cause people to miss the signs that someone is untrustworthy, and that "older adults are far more likely than the younger adults to believe and 'falsely remember' misinformation as correct thus leaving them more vulnerable to getting scammed."
The FBI states that senior citizens are often targeted because they most likely own their home, have excellent credit and have money saved, and that many people who grew up in the 1930s, 1940s and 1950s were generally raised to be polite and trusting, qualities that the scammers then try to exploit. According to the FBI, the elderly are less likely to report a scam than younger people because they don't know who to report it to, are too ashamed, may not even realize they have been scammed, or are worried about losing their independence if someone finds out. Scammers are counting on elderly victims having some age-induced memory loss thereby making them poor witnesses with less detail to report and taking longer to even realize they've been conned to begin with.

A Few Final Thoughts Around Tax Time
Scammers often follow postal carriers on their routes to steal tax information from mailboxes. If you haven't received a specific form you were waiting for in order to complete your taxes, contact the organization that would have issued it, and if you suspect it was stolen, contact the IRS. If you plan to mail in your tax return once it's completed, take it directly to the post office or a postal service mailbox in a busy location, rather than putting it in your own mailbox. If you get a call from someone claiming to be from the IRS and asking for money or for personal information, do not give out any information and hang up.

Fraud against older adults continues to be a serious problem. Stay alert to potential scams and trust your instincts. Taking precautions in terms of the personal and financial information of your family or of seniors you care for may help prevent scams against the elderly.

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