Tax Scams Targeting the Elderly

Being caught in tax scams can happen to anyone even though most of us think we’re too smart to get fleeced. Unfortunately, even the most cautious person can get ripped-off. When older adults are defrauded, the effects can be devastating.

Your Aging Parents are at Risk of Fraud during Tax Season: What you can do about it!

by Jullie Gray, MSW, LICSW, CMC – Aging Life Care Association™ Member and Fellow of the Leadership Academy

One insidious fraud making the rounds during tax season involves IRS impersonators. Swindlers claiming to be from the IRS tell intended victims they owe taxes and must pay using a pre-paid debit card, money order or a wire transfer. They threaten those who refuse to pay with a grand jury indictment, immediate arrest, deportation or loss of a business or driver’s license.

The Treasury Inspector General, J. Russell George warns, “As the tax filing season begins, it is critical that all taxpayers continue to be wary of unsolicited telephone calls and e-mails from individuals claiming to be IRS and Treasury employees”. He described the imposters as, “aggressive and relentless.”

Aging makes us more vulnerable to being cheated

Researchers have shown that older people are especially vulnerable to being cheated. According to a study by Shelley E. Taylor, a professor of psychology at UCLA, changes in our brains as we age cause us to miss common cues that someone is untrustworthy.^{^[1]} In another study, Larry Jacoby, professor of psychology at Washington University in St. Louis, found 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.^{^[2]}

Despite the fact that older people are at high risk of being swindled, the FBI notes they are less likely to report being defrauded than younger people because they:

Don’t know who to report it to
Are too ashamed at having been scammed
May not know they have been conned
Are concerned about losing their independence if someone finds out

What you need to know about the IRS process

If there is a problem with a person’s taxes, the IRS issues notices by mail – not by phone. The IRS will never ask for payment by phone using a prepaid debit card, money order or wire transfer. Nor will they ask for a credit card number over the phone, request personal or financial information by e-mail, text, or any social media.

Don’t become a victim

Even the most cautious person can get ripped-off so remain vigilant, regardless of your age. Protect yourself and your parents by learning common tactics used by tax scam artists. Talk to your parents about the tricks and remind them that thieves often call or contact their victim several times to evaluate their memory and openness to their ploy. The bad guys are looking for weakness and an opportunity to strike.

You can spot IRS imposters because they will:

Utilize an automated robocall machine
Use common names and fake IRS badge numbers
May know the last four digits of the victim’s social security number
Make caller ID information appear as if the IRS is calling
Aggressively demand immediate payment to avoid being criminally charged or arrested
Claim that hanging up the telephone will cause the immediate issuance of an arrest warrant for unpaid taxes
Send bogus IRS e-mails to support their scam
Call a second or third time claiming to be the police or department of motor vehicles, and the caller ID again supports their claim

If you or your parents are contacted by someone claiming to be from the IRS:

Hang up immediately
Forward scam e-mails to phishing@irs.gov
Do not open any attachments or click on any links in those e-mails
If you owe Federal taxes, or think you might owe taxes, call the IRS at 800-829-1040. IRS workers can help you with your payment questions.
If you do not owe taxes, fill out the “IRS Impersonation scam” form on the Treasury Inspector General for Tax Administration’s (TIGTA) website, www.tigta.gov, or call TIGTA at 800-366-4484.
You can also file a complaint with the Federal Trade Commission at www.FTC.gov. Add “IRS Telephone Scam” to the comments in your complaint.

The cost of being scammed is enormous for aging adults

Financial exploitation of any kind takes a heavy toll on vulnerable adults. Unlike younger people, older retired victims are not usually able to earn money to replace their losses. Seniors who are defrauded out of significant resources could risk losing their homes and may not be able to afford to buy medications or food. As a result, chronic medical conditions can become exacerbated and may lead to hospitalization from the stress of being victimized. Some victims experience severe depression and premature death; others have to apply for state assistance programs to survive after being fleeced. All of these factors highlight the need to report scams and financial exploitation to the authorities so they can investigate and arrest perpetrators. Reports of tax scams also result in greater media attention and consumer education.

Aging Life Care Professionals™ – A powerful tool to combat fraud

If your parent is isolated, frail, cognitively impaired, or lives far away from you, hiring an Aging Life Care Professional may be one of the most powerful protection tools available. These professionals can deter abuse and exploitation through ongoing oversight. They will report abuse and exploitation if it occurs, make follow up calls, advocate on behalf of the older person, and make sure the victim gets emotional support as they go through the legal process. To find your own Aging Life Care Professional go to aginglifecare.org.

About the author: A Fellow of the Leadership Academy, Jullie Gray has over 30 years of experience in healthcare and aging. She is a Principal at Aging Wisdom in Seattle, WA. Jullie is the President of the National Academy of Certified Care Managers and the Past President of the Aging Life Care Association. Jullie Serves on the King County Elder Abuse Council in Washington State. Follow her on LinkedIn and Twitter @agingwisdom, or email her at jgray@agingwisdom.com. Aging Wisdom has a presence on Facebook – we invite you to like our page.

[1] Walport, S. (2012) Why older adults become fraud victims more often. http://newsroom.ucla.edu/releases/why-older-adults-become-fraud-241076

[2] Jacoby LL., et al. (2005). Aging, Subjective Experience, and Cognitive Control: Dramatic False Remembering by Older Adults. Journal of Experimental Psychology. Vol. 134, No. 2, 131–148. American Psychological Association

This blog is for informational purposes only and does not constitute, nor is it intended to be a substitute for, professional advice, diagnosis, or treatment. Information on this blog does not necessarily reflect official positions of the Aging Life Care Association™ and is provided “as is” without warranty. Always consult with a qualified professional with any particular questions you may have regarding your or a family member’s needs.