In mid-July, the IRS issued a bulletin warning people of multiple tax scams targeting taxpayers, especially retirees. The “Dirty Dozen” list outlines several scams that people should be looking out for.
“Tax scams tend to rise during tax season or during times of crisis, and scam artists are using pandemic to try stealing money and information from honest taxpayers…”
IRS Commissioner Chuck Rettig
A recent Marketing Corner post addressed phishing scams and the uptick of data breaches during the COVID-19 pandemic. This week, we revisit the topic to cover those scams that often target senior citizens and retirees. Among those scams included on the “Dirty Dozen” list that you should discuss with your elderly clients include:
Senior Fraud
According to the IRS and other government agencies, scammers target senior citizens more than any other demographic. This is largely due to the increase in seniors who have embraced technology and digital mediums (social media in particular). Part of the conversation you have with retired clients should involve education about phishing scams that use digital platforms to solicit personal information. You should also urge them to speak with family and friends about any suspicious communications.
Fake Charities
Fake charity scams are on the rise during the pandemic. Criminals will use a variety of tactics to target victims, most commonly using phone calls or text messages to make contact. Emails and even unsolicited in-person attempts to defraud victims are not unheard of.
Many fraudulent charities will have websites and names that resemble legitimate fundraisers, and will often ask for personal information. Those who want to donate are urged to check whether the charity is legitimate by asking for the Employer ID Number (EIN).
IRS Impersonation Scams
Another common scam involves phone calls from someone claiming to be with the IRS. The caller will tell their target they have an outstanding tax bill and demand payment and/or financial information over the phone. The potential victim is often threatened with arrest if the bill isn’t paid immediately. Some of these calls will come from an actual person, but robocalls have become more prevalent.
Remind clients that the IRS will never contact taxpayers by phone to collect on overdue taxes. If you have a client who has received one of these calls or is worried about a potential issue with their taxes, offer as much help as possible and tell them to contact the IRS.
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The COVID-19 pandemic has given criminals multiple opportunities to scam people out of their money and personal information. They view seniors as easy targets. While these scams are widely covered by news outlets, it is still important for advisors to make sure retirees know what to look out for. It only takes one successful scam to drain someone’s entire nest egg. A proactive advisor will take the time to keep their clients safe from falling victim to these criminals.
For the full “Dirty Dozen” list, visit here.
