“Rejected.” Your pulse quickens as you read the letter your mother received from the IRS after filing her tax return. Someone else filed her taxes before you and collected her refund. You were hoping that money would help with her expenses you’ve been struggling to keep up now that she’s on a fixed income. You have been the only one helping with her taxes for the last three years, so who else could have filed it? How did they get her information? What are you going to do?

The IRS provides resources on what to do after something like this occurs, including filling out a Form 14039, also known as an Identity Theft Affidavit. But what could have been done to help prevent this disaster in the first place?

Tax season is upon us, and the looming threat of elder fraud is rapidly increasing. Predators actively target this community, exploiting elderly citizens and their families. In 2021, there were 92,371 reported victims of Elder Fraud which accounted for $1.7 billion in losses, a shocking 74% increase from 2020 according to the FBI. These scams are increasingly effective, given the surge in technology and resources available to predators. Recognizing common schemes through identifying red flags and implementing prevention methods will help mitigate the risk of your loved ones becoming another statistic.

Tax Scams

The most common tax schemes fall into one of the following categories: phone scams, phishing, and tax provider scams. While the characteristics of each scam may differ, they are all motivated by the possibility of a lucrative pay day.

Phone Scams or Vishing

Phone scams often leverage personal information that can be easily obtained online or purchased on the dark web, such as name and address, and other personal information. Scams utilizing voice calls and voicemails to obtain sensitive information are known as vishing. Scammers lure the victim into a conversation using this information and disguise themselves as an IRS agent or other government official looking to collect supposed back taxes. The victim is pressured into paying by the threat of an arrest or hefty fines.

Email Scams or Phishing

Phishing is a common cyber scheme used to obtain personal information from victims using emails or other messages online. Scammers attempt to exploit IRS customer electronic profiles by asking victims to update their profile and unknowingly send the information to a fake IRS website using a link within the email or demand the victim reply directly to the email to confirm their personal information.

One of the most common phishing and vishing scams that emerge during tax season is impersonation of a government official where they attempt to obtain sensitive information from the victim. For example, a perpetrator may call a victim pretending to be a representative from the Social Security Administration (SSA) and indicate that their Social Security Number is locked or set to expire and demand payment to resolve the issue. Payment is typically requested through unusual means such as cryptocurrency, gift cards, or wire transfer.

With looming tax filing deadlines, consumers are often more susceptible to falling for these types of scams during this time of year. Fraudsters can use information collected in vishing, smishing (SMS phishing) or traditional phishing scams to file false tax returns on behalf of unknowing individuals to collect their refunds. It is more important than ever to be vigilant about suspicious communication, as well as what information you are offering online about yourself, as it could be exploited by bad actors.

Some signs that a phone call, email, or text message are a scam are:

• Lack of Official Communication. Government agencies do not usually call, text, or email unless they have ongoing business with the individual. They typically communicate by letter. Additionally, victims may notice the sender’s address is “off” with a typo or extra characters.
• Sense of Urgency. If a victim is threatened with an issue that needs to be resolved immediately (e.g., an arrest warrant) the sense of urgency created can prevent the victim from thinking through the validity of the issue presented.
• Impossible Claims. Government official impersonation scams are often rooted in false or impossible claims. For example, social security numbers don’t expire and do not require payment to renew.
• Abnormal Scenario. Often, scams will request suspicious payment methods to resolve an alleged issue, such as paying in cryptocurrency, gift cards, or wiring a significant amount of money.
• Unprofessional or Error-Ridden Design. Telltale signs that something is amiss in an email may include typos in a document or a blurry and skewed design.
• Suspicious Attachments. As goes with all communication, individuals should never open attachments they did not anticipate receiving, as they may be riddled with malware that can collect personal information or more.

In any of the scenarios above, the best course of action is to verify the legitimacy of the contact by disconnecting and contacting the agency through an official method of correspondence as found on the official government website. If individuals are approached by scammers, it is critical to report that information to help prevent future victims from being contacted.

To prevent falling victim to these scams, individuals can take action such as signing up for the National Do Not Call Registry and sending unknown numbers to voicemail. Additionally, they can avoid sharing their personal information, including banking details, with inquiring parties through uncommon communication methods. In the event of unanticipated email or text correspondence, individuals should scrutinize and avoid clicking links or opening attachments, as they can provide a gateway for fraudsters.

Tax Provider Scams

Predators are eager to lure victims into various tax provider schemes throughout tax season. As we near the close of tax season and a majority of people rush to file their taxes, it’s important to sniff out the fraudulent tax providers lurking among us.

Signs your tax provider could be a fraud:

• Promise of large refunds. If it sounds like it’s too good to be true, it probably is. Beware of tax providers promising large and instant returns. While it is possible to get a large return, it is not guaranteed and not everyone will qualify.
• False credentials. If you’re suspicious of a tax preparer, look up their Preparer Tax Identification Number (“PTIN”). The IRS requires all tax preparers to have a PTIN which is maintained in an online directory (https://irs.treasury.gov/rpo/rpo.jsf).
• Alternative Payment. Beware of preparers requesting you pay your taxes using alternative methods (e.g., Venmo, Zelle, Gift Cards). You should pay for your taxes directly through the IRS.
• Reluctance to File Electronically. Fraudulent tax preparers are looking to steal your information and will often be reluctant to file your taxes electronically, this option cannot be denied to a taxpayer, and can be a telltale sign of a scammer.

Recognizing common schemes and proactively identifying red flags are critical to mitigating risks of fraud scenarios and vishing scams this tax season. Appointing a trusted contact for bank accounts and investments and signing up for services that track your financial accounts, including credit cards and bank accounts, or periodically reviewing your own credit reports, which are available for free annually, for new or unknown accounts or activity are proactive controls to consider implementing to protect yourself and loved ones from falling victim to common scams. Additionally, approach proactive outreach with action items from a purported government agency with skepticism—it is always better to verify the legitimacy of the contact before complying with a request. Taking steps now can safeguard financial and personal information in the long-term.

Victoria DiGiovanni is a co-author of this article.