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Money February 2015

Dollar Sense

Tax-related Scams That Target the Elderly and Vulnerable and What to Watch For

By Teresa Ambord

The tax credit is real, and is called the American Opportunity Tax Credit or AOTC. To qualify, the taxpayer must be currently enrolled in higher education. Con artists rope in unsuspecting seniors by convincing them the credit is available to them even if they went to college many years ago.

Threatening Phone Calls and Messages Are Probably Fake

Last tax season, the IRS and the Treasury Inspector General for Tax Administration warned that fake IRS agents were placing threatening phone calls to elderly citizens and also to immigrants. The belief of course, is that these people will be easily frightened and vulnerable to threats. The threats include deportation, jail, and the revocation of the person’s driver’s license or business license if appropriate. Often, the caller is armed with the last four digits of the taxpayer’s Social Security number, which gives them an air of credibility. The caller may follow up the phone threat with a threatening, but official looking email.

Nobody wants to believe older people would fall for such a scam. But fear can reduce a competent person to taking incompetent actions. Before the worst happens, ask your parents and friends if they have had calls from the IRS and tell them about this scam.

 

What Should You Tell Them to Watch For?

  • Let them know that even if the caller ID says “IRS,” it may well be fake. The same type of scam may appear to be from the DMV or the police.
  • The IRS always communicates first by sending snail mail, not by phone and not by email. However, with that said, thieves have been known to send fake snail mail too. You might tell parents or other relatives if they receive any communication in any form from the IRS, you will have your accountant look at it.
  • The IRS will not call and demand payment by wire transfer or debit card, and will not threaten to revoke a license to secure payment.
  • Thieves are able to get bits of information, such as part of a Social Security number, and use that to make the victim believe the lie, so let them know it is not uncommon and does not prove the caller is authentic.

 

But What If the Person Really Does Owe Back Taxes?

Obviously if that’s the case, the person is more likely to believe the scam. The tax agency says they should call the IRS directly to find out the truth. The number is 1-800-829-1040. It won’t surprise you to hear that any call to the IRS will not be quick, and it will take some patience.

 

A Scam That Involves a Real Tax Credit

Depending on the nature of their income, many seniors are not required to file taxes at all. But thieves see this as an opportunity to scare elderly people into believing that if they do file, they are entitled to a lucrative credit worth up to $2,500. After they hook the attention of the senior these thieves offer their help in filing the tax forms.

The tax credit is real, and is called the American Opportunity Tax Credit or AOTC. To qualify, the taxpayer must be currently enrolled in higher education. Con artists rope in unsuspecting seniors by convincing them the credit is available to them even if they went to college many years ago.

Here is what you should tell folks to watch for:

  • Solicitation calls from tax companies.
  • Offers from anyone saying they will help you file your taxes. Even if you think the caller might be genuine, insist on getting a name and contact number. Then call the Better Business Bureau to find out if complaints have been filed against the person.
  • Also beware of offers of tax help made over the Internet. The con artists ask you to call a number to get the assistance, and when you call, they ask for personal information, like your Social Security number.

 

Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

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