Unscrupulous individuals often prey on the elderly, and tax season provides an opportunity for them to do so. Understanding common tax scams can help you protect your parent from financial loss.
Review these warnings from the IRS about scams to watch out for during this tax season.
The unpaid tax scam
Phishers use this robocall technique to demand wire transfers, prepaid debit cards and other forms of payment for “past-due taxes.” The recording typically threatens to cancel the person’s Social Security number unless he or she immediately pays the caller the specified amount.
The IRS will contact a taxpayer through the mail if he or she has unpaid taxes. If your loved one thinks they have a tax bill to settle, they can contact the IRS directly and should not make any payments to a robocaller.
The natural disaster scam
With this method, callers solicit bogus donations after natural disasters and other tragic events. The IRS warns taxpayers to make sure that all charitable donations go to legitimate organizations. Your parent could lose his or her generous donation and the associated tax exemption.
The fake tax preparer scam
Make sure that your loved one chooses a reputable accountant if he or she needs tax preparation help. So-called ghost preparers may charge high fees to prepare tax returns without registering with the IRS as a paid preparer. They may divert the taxpayer’s refund into their own account, then disappear.
Remind your family member that the IRS will not text, email or contact them through social media. They should not give out personal information, especially financial details, in these types of messages or over the phone.