Tax scams have caused thousands of people to lose money and experience other difficulties like tax penalties. Unfortunately, many scammers target seniors through the mail and by phone or email. The good news is that you can protect yourself from falling victim to scams by following these tips.
With many tax scams, a fraudster will write, call or email a senior and claim to represent the IRS. They may say there was a problem processing a tax refund or the victim owes money. Then, they attempt to obtain personal information, such as the person’s Social Security number, bank information or credit card company, or ask to have a payment sent to them.
Be skeptical of anyone who calls or emails claiming to be the IRS. Generally, the IRS communicates via U.S. mail. They may call or email if you've already contacted them directly with a question or concern, but they usually won’t initiate contact this way.
In some cases, people pose as tax preparers to steal information or money from seniors. To protect yourself, use a certified accountant, a well-known tax preparing service or a tax preparer who's registered with the IRS. The government has a tool you can use to search for registered tax preparers in Grand Junction, CO, and residents of Grand Villa senior living community can schedule transportation to appointments in the area.
Filing online can be a convenient alternative to doing your taxes yourself or working with a preparer. These websites use encryption to protect your personal information. However, you need to access them on a secure network to ensure full protection. Avoid filing your taxes online in public places that have open Wi-Fi networks you don’t need a password to access. If you use a shared computer in a place that has a secure network, such as a public library, be sure to sign out of the website before you leave the terminal.
Identity thieves can steal information by hacking the systems of credit card companies, retailers and websites. When they obtain sensitive data, they may sell it to other thieves or use it themselves to commit fraud. One popular scam is using someone else’s Social Security number to file a fraudulent tax return. The person then enters fake information that allows them to get a sizable tax refund. They have the money deposited into their account without you knowing.
If you try to file your own tax return electronically after someone submitted a fraudulent return, you’ll usually receive an error from the government. Should this happen to you, contact the IRS immediately. It will have you complete an affidavit form and instruct you to file by mail. In most cases, you’ll also need to file a police report.
Because an identity thief may have used your Social Security number to commit other fraud, check your credit report for anything you don’t recognize. You can request free copies of your credit report from the three credit reporting agencies online.
Filing your tax return as early as possible may help protect you from fraud. Once you file your annual tax return, a fraudster won’t be able to submit a second one using your Social Security number. If you’re getting a tax refund, filing early may also help you get your money more quickly.
If you receive a phone call or a notice by mail or email from the IRS that seems suspicious, don’t follow the instructions given to you by the letter, message or caller. Instead, get in touch with the IRS directly using the official contact information on the agency’s website. An IRS customer service agent can look up your information and let you know whether the notice or call was legitimate.
Another common tax scam is fake charitable donations. With this scheme, a criminal will solicit a donation from a senior for a nonprofit organization that isn’t real. After they receive money, they may change the name of their fake charity or simply disappear. If the senior claims the charitable contribution on their taxes and the IRS investigates, they could be on the hook for an inappropriate deduction.
To protect yourself from fake charitable contributions, do some research before donating. Use sites like BBB Wise Giving Alliance, Charity Navigator, CharityWatch and Candid to find out if the charity is reputable. You can also use the IRS’ tax-exempt organization search tool to look up charities.
The caller ID on your landline or mobile phone may seem like a good way to determine if a caller is who they say they are. However, you shouldn’t trust what the display says. Scammers can use technology to change the name and phone number that appears on caller ID so it looks like they’re from the IRS when they aren’t.
How a person requests a tax payment can also be a giveaway that they’re a scammer. The IRS will never ask you to submit a check or money order in someone else’s name, nor will it have you pay with gift cards. If the scammer asks you to wire money, check the bank information against the IRS’ official wire instructions.