From declining minds and bodies to the desire for independence and housing issues, seniors today face many challenges. Near the top of the list? Financial scams. The IRS recently highlighted one particular problem aimed at draining senior bank accounts: imposters posing as IRS representatives.
Understanding Elder Tax Fraud
StopFraud.gov defines elder fraud as
“an act targeting older adults in which attempts are made to deceive with promises of goods, services, or financial benefits that do not exist, were never intended to be provided, or were misrepresented.”
Elder fraud includes the quickly growing category of IRS imposter scams. According to a recent release from the IRS newsroom, thousands of Americans have lost millions of dollars to fake IRS communication-related tax schemes in recent years. The Seattle Times reports that calls about fraudsters posing as IRS agents are the top complaint to a U.S. Senate hotline for seniors. Unfortunately, this can cost seniors dearly and -- when repeated over time -- can bilk them of their entire savings.
Under the scam, imposters posing as IRS agents call seniors making hostile threats alleging debts to the IRS. These are both convincing and disarming. Not only do callers know a great deal about their targets; they can also change the caller ID to look like it represents the IRS. They may also have bogus IRS identification numbers. Typically, victims are told to make immediate payment via a wire transfer or pre-loaded debit card. Those who refuse to cooperate are usually threatened with police action.
In other cases, targets may be deceived into sharing sensitive data with callers through the promise of a refund. In either scenario, phone scammers may leave “urgent” messages for seniors to call back.
Cautions IRS Commissioner John Koskinen,
“The IRS warns seniors about these aggressive phone calls that can be frightening and intimidating. We urge seniors to safeguard their personal information at all times. Don't let the convincing tone of these scam calls lead you to provide personal or credit card information, potentially losing hundreds or thousands of dollars. Just hang up and avoid becoming a victim to these criminals."
Tips for Identifying IRS Fraud
According to the IRS, there are four simple ways for potential targets to identify tax scams, including the following:
- The IRS and its authorized agencies do not use prepaid debit cards, gift cards, or wire transfers for collecting tax payments, and will never demand payment through these methods. All tax payment requests should be payable to the U.S. Treasury and not to third parties.
- The IRS and its authorized agencies will never ask for credit card or debit card information on the phone.
- The IRS and its authorized agencies will never threaten to notify the local police or other law enforcement groups.
- The IRS and its agencies will always give taxpayers the opportunity to appeal or question the amount of fund owned.
While a private debt collection program does authorize certain agencies under federal law to collect tax payments on behalf of the government, methods used by outside agencies will be preceded by a letter of notification from the IRS, including notice of the transfer to a private collection agency.
Tips for Handling Tax Imposter Fraud
If you are contacted by someone claiming to be the IRS in this manner and you don’t owe taxes, hang up immediately without providing any information.
- The IRS recommends that you report the call to the Treasury Inspector General for Tax Administration by calling 800-366-4484 or visiting the “IRS Impersonation Scam Reporting web site.
- You should also report the call to the Federal Trade Commission using the FTC Complaint Assistant on FTC.gov. (Include “IRS Telephone Scam” in the notes for clarification.)
- If you are contacted by someone claiming to be the IRS in this manner and you do owe money, hang up without providing personal information and call the IRS directly for assistance at 800-829-1040.
- The IRS will NEVER use email, texts, or social media to discuss personal tax issues. If you receive a message via one of these channels that appear to come from the IRS, forward the email to firstname.lastname@example.org, then delete it. Do not reply to the message, click on any links, or open any attachments as these may contain malicious code.
While IRS imposter fraud can be a major threat to seniors, increased awareness can significantly reduce the risk. Continues Koskinen,
"If someone calls unexpectedly claiming to be from the IRS with aggressive threats if you don't pay immediately, it's a scam artist calling. Taxpayers have rights, and this is not how we do business."
For more useful information on IRS imposter tax scams and prevention while caregiving for the elderly, watch our video on How to Avoid Potential Tax Scams.
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