Tax season can be scam season for retirees

4-minute read

Your tax return may add some extra spending cash to your budget, but the popular expression rings true: more money can bring more problems. You may get unwanted attention from scammers.

“During tax season, scammers increase their efforts to steal money, Social Security numbers, and identities from older adults. They use scare tactics to get a quick and emotional response in hopes of making you cooperate, instead of taking your time to evaluate the situation and spot the scam,” said Patricia Hord, grant, education and communication specialist for the Office of Consumer Credit Commissioner.

To avoid fraudsters this tax season and beyond, watch out for key warning signs, Hord said. Scammers pretend to be from organizations you recognize. They may say there is a problem with your tax refund. They may pressure you to act immediately, and ask you to make a payment in an unconventional way.

Hord talked to ERS about why retirees are targets and shared the best ways to avoid getting scammed.

Why are older adults like retirees often at risk?

• Financial stability. Older adults have been in the workforce longer and may have large amounts of money in savings, retirement or investment accounts, which make them more attractive to scammers.
• Easy Access. Age, failing health or limited mobility require some retirees to depend on others for help with shopping, paying bills or other important activities. This gives caregivers access to credit cards, account numbers and other personal financial information, which they can use to create fake accounts, make unauthorized withdrawals and commit other types of fraud. Older adults may not report the fraud for fear of losing the caretaker’s services, to avoid the risk of retaliation or out of loyalty to a family member.
• Isolation. Retirees without a support system are at greater risk of being scammed. Sometimes, talking to a trusted friend or family member about a questionable investment opportunity or a pushy, new Facebook friend can keep a person from being duped.

What is the best way to avoid scams this tax season?

• Verify if the letter, email or phone call you received is coming from the stated source. If you receive a notice from the IRS, contact them directly, but be sure not to use any of the contact information in the letter or email you received.
• Beware of phishing and smishing scams. These occur when scammers send you an email or text message posing as the IRS or your tax preparer, and request personal information so they can complete your tax return. They may ask for your child’s Social Security number or your bank account number. Don’t fall for it. Instead of hitting “reply,” contact the source directly through a verified number, email address or website.
• Establish an online account through IRS.gov to make and view payments, access your tax records and more. Watch out for anyone asking you for payments in non-traditional ways. If a letter from the IRS states you have special permission to make a payment via gift card if you do it within 72 hours; it is a SCAM!

To report tax-related scams, contact the IRS one of the ways outlined on this page. For all other scams, contact the Federal Trade Commission at reportfraud.ftc.gov.

Spot the scammer

According to the IRS website, scammers can impersonate IRS agents in a variety of ways. Here are some ways to know if that IRS call, email, text or knock on the door is legitimate.

On the phone

The IRS will never:

• demand immediate payment by debit card, gift card or wire transfer;
• threaten to arrest you for not submitting a payment;
• demand payment without the chance to ask questions or appeal the amount owed; or
• call unexpectedly about a tax refund.

If you receive a scam call, record the number and hang up. Report the call to the Treasury Inspector General for Tax Administration using their reporting form or calling (800) 366-4484.

By mail

Mail scams can be hard to spot. Scam letters might use the IRS logo or refer to unclaimed refunds. If you’re responding to a letter you think is from the IRS, do not send personal information, which can be used by identity thieves. You can authenticate any IRS mail by contacting IRS customer service at irs.gov/help/let-us-help-you.

In person

If the IRS requires an in-person visit, the taxpayer will receive a 725-B Letter to schedule a meeting. Verify it by contacting IRS customer service at irs.gov/help/let-us-help-you or call them directly at (800) 829-1040.

Electronically

The IRS will never contact a taxpayer by email, text or social media. You can report all unsolicited email claiming to be from the IRS or an IRS-related function to phishing@irs.gov.