How to Spot, and Prevent, the Tax Scams That Target Elders

McAfee

Mar 18, 2024

8 MIN READ

How to Spot, and Prevent, the Tax Scams That Target Elders

Elder scams cost seniors in the U.S. some $3 billion annually. And tax season adds a healthy sum to that appalling figure.

What makes seniors such a prime target for tax scams? The Federal Bureau of Investigation (FBI) states several factors. For one, elders are typically trusting and polite. Additionally, many own their own home, have some manner of savings, and enjoy the benefits of good credit—all of which make for an ideal victim profile.

Also according to the FBI, elders may be less able or willing to report being scammed because they may not know the exact way in which they were scammed, or they may feel a sense of shame over it, or even some combination of the two. Moreover, being scammed may instill fear that family members will lose confidence in their ability to look after their own affairs.

If there’s one thing that we can do for our elders, it’s help them raise their critical hackles so they can spot these scams and stop them in their tracks, particularly around tax time. With that, let’s see how crooks target elders, what those scams look and feel like, along with the things we can do to keep ourselves and our loved ones from getting stung.

The IRS imposter scam

The phone rings, and an assertive voice admonishes an elder for non-payment of taxes. The readout on the caller ID shows “Internal Revenue Service” or “IRS,” the person cites an IRS badge number, and the victim is told to pay now via a wire transfer or prepaid gift card. The caller even knows the last four digits of their Social Security Number (SSN). This is a scam.

The caller, and the claim of non-payment, are 100 percent bogus. Even with those last four digits of the SSN attempting to add credibility, it’s still bogus. (Chances are, those last four digits were compromised elsewhere and ended up in the hands of the thieves by way of the black market or dark web so that they could use them in scams just like these.)

Some IRS imposter scams take it a step further. Fraudsters will threaten victims with arrest, deportation, or other legal action, like a lien on funds or the suspension of a driver’s license. They’ll make repeated calls as well, sometimes with additional imposters posing as law enforcement as a means of intimidating elders into payment.

The IRS will never threaten you or someone you know in such a way.

In fact, the IRS will never call you to demand payment. Nor will the IRS ever ask you to wire funds or pay with a gift card or prepaid debit card. And if the IRS claims you do owe funds, you will be notified of your rights as a taxpayer and be given the opportunity to make an appeal. If there’s any question about making payments to the IRS, the IRS has specific guidelines as to how to make a payment properly and safely on their official website.

It’s also helpful to know what the IRS will do in the event you owe taxes. In fact, they have an entire page that spells out how to know it’s really the IRS calling or knocking at your door. It’s a quick read and a worthwhile one at that.

In all, the IRS will contact you by mail or in person. Should you get one of these calls, hang up. Then, report it. I’ll include a list of ways you can file a report at the end of the article.

Tax scams and robocalls

Whether it’s a disembodied voice generated by a computer or a scripted message that’s been recorded by a person, robocalls provide scammers with another favorite avenue of attack. The approach is often quite like the phone scam outlined above, albeit less personalized because the attack is a canned robocall. However, robocalls allow crooks to cast a much larger net in the hopes of illegally wresting money away from victims. In effect, they can spam hundreds or thousands of people with one message in the hopes of landing a bite.

While perhaps not as personalized as other imposter scams, they can still create that innate sense of unease of being contacted by the IRS and harangue a victim into dialing a phony call center where they are further pressured into paying by wire or with a prepaid card, just like in other imposter scams. As above, your course of action here is to simply hang up and report it.

IRS email scams and phishing attacks

Here’s another popular attack. An elder gets an unsolicited email from what appears to be the IRS, yet isn’t. The phony email asks them to update or verify their personal or financial information for a payment or refund. The email may also contain an attachment which they are instructed to click and open. Again, all of these are scams.

Going back to what we talked about earlier, that’s not how the IRS will contact you. These are phishing attacks aimed at grifting prized personal and financial information that scammers can use to commit acts of theft or embezzlement. In the case of the attachment, it very well may contain malware that can do further harm to their device, finances, or personal information.

If you receive one of these emails, don’t open it. And certainly don’t open any attachments—which holds true for any unsolicited email you receive with an attachment.

Preventing tax scams from happening

Beyond simply knowing how to spot a possible attack, you can do several things to prevent one from happening in the first place.

Physical security

First let’s start with some good, old-fashioned physical security. You may also want to look into purchasing a locking mailbox. Mail and porch theft are still prevalent, and it’s not uncommon for thieves to harvest personal and financial information by simply lifting it from your mailbox.

Another cornerstone of physical security is shredding paper correspondence that contains personal or financial information, such as bills, medical documents, bank statements and so forth. I suggest investing a few dollars on an actual paper shredder, which are typically inexpensive if you look for a home model. If you have sensitive paper documents in bulk, such as old tax records that you no longer need to save, consider calling upon a professional service that can drive up to your home and do that high volume of shredding for you.

Likewise, consider the physical security of your digital devices. Make sure you lock your smartphones, tablets, and computers with a PIN or password. Losing a device is a terrible strain enough, let alone knowing that the personal and financial information on them could end up in the hands of a crook. Also see if tracking is available on your device. That way, enabling device tracking can help you locate a lost or stolen item.

Digital security

There are plenty of things you can do to protect yourself on the digital front too. Step one is installing comprehensive security software on your devices. This will safeguard you in several ways, such as email filters that will protect you from phishing attacks, features that will warn you of sketchy links and downloads, plus further protection for your identity and privacy—in addition to overall protection from viruses, malware, and other cyberattacks.

Additional features in comprehensive security software that can protect you from tax scams include:

File encryption, which renders your most sensitive files into digital gibberish without the encryption key to translate them back.
A digital file shredder that permanently deletes old files from your computer (simply dropping them into the desktop trashcan doesn’t do that—those files can be easily recovered).
Identity theft protection, which monitors the dark web for your personal info that might have been leaked online and immediately alerts you if you might be at risk of fraud.

And here’s one item that certainly bears mentioning: dispose of your old technology securely. What’s on that old hard drive of yours? That old computer may contain loads of precious personal and financial info on it. Look into the e-waste disposal options in your community. There are services that will dispose of and recycle old technology while doing it in a secure manner so the data and info on your device doesn’t see the light of day again.

Spot a tax scam? Report it.

As said earlier, don’t let a bad deed go unreported. The IRS offers the following avenues of communication to report scams.

Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
Report phone scams to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.
Report an unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov.

Stay safe this tax season!

In all, learning to recognize the scams that crooks aim at elders and putting some strong security measures in place can help prevent these crimes from happening to you or a loved one. Take a moment to act. It’s vital, because your personal information has a hefty price tag associated with it—both at tax time and any time.