Research shows that an estimated 15.4 million Americans are affected by fraud each year, costing an estimated $16 billion. Sadly, older adults are at a higher risk for identity theft than younger adults. That’s because they are a favorite target of scammers due to the fact that they often have savings set aside, home equity, and tend to be more trusting. It seems that every year a new scam pops up, and this year is no different. The IRS is warning older adults and their caregivers to be on the lookout for a whole new tax scam.
Beware of Fake Returns
This latest scam actually involves using a person’s identity to deposit a fake tax return into their bank account. The scammers steal information from professional tax preparers and file fake tax returns. When the refund is deposited into the target’s bank account, the scammer contacts them. They say that the return was an error and must be sent back. However, they provide information for a fake collection agency and ask that the money be sent there, where it really goes into the scammer’s pocket.
One variation of the scam involves the target receiving an automated call claiming to be from the IRS. The caller threatens fines, an arrest warrant, and having the person’s Social Security number “blacklisted.” They are instructed to call and arrange a refund of the fake tax return.
Sometimes people who are targeted by this scam find out about it when they try to file their taxes. They are informed that a return has been filed using their Social Security Number, so their real return is rejected.
Responding to Tax Fraud Scams
If you think your aging family member has been a target of Tax ID theft, here are the steps caregivers can help them to take:
- Contact the Federal Trade Commission (FTC) to file a report.
- Call one of the major credit bureaus (Equifax, Experian, or TransUnion) to request a fraud alert be placed on credit accounts.
- Close any financial accounts that were opened without the senior’s position and report any suspicious activity on accounts.
- If the senior receives a legitimate IRS notice, respond to it immediately.
- File an Identity Theft Affidavit (IRS Form 14039).
- Help the older adult to file their taxes, even if it has to be done using paper forms.
- Contact the state tax agency to find out what steps should be taken for state taxes.
By keeping a close eye on seniors’ financial statements, caregivers can further assist to protect their aging family members from identity theft. Caregivers who notice strange activity on accounts should take immediate action. Also, caregivers should take the time to talk to older adults about identity theft and how they can protect themselves.