This time of year, tax returns are being finalized. Many individuals and families are preparing to receive a refund, while others are anticipating payments to the IRS. Fraudsters thrive on the transition of money and the opportunity to get their sticky hands on it. Although this can be a stressful time of year for many, staying on high alert is essential. One thing to look for is scams, specifically around tax refunds and the IRS.
In 2023, the Internal Revenue Service (IRS) identified $5.5 billion in fraud. Older adults are especially vulnerable to these schemes. Scammers know people in this age group often have substantial savings and retirement funds. This makes older adults a prime target.
It’s important to keep in mind how the IRS typically contacts you. Most commonly, the IRS will contact you through regular postal mail first. Letters sent from the IRS can be verified as legitimate through their website.
With taxes being a pressing item for many, it’s easy to see how fraudsters can create concern and a sense of urgency. The IRS will not contact you or take payment via social media outlets. They will not accept or request gift cards, wire transfers, or prepaid debit cards as payment. Threats coming from these fraudsters pretending to be the IRS, such as indicating they are calling the police or immigration officials, is a scare tactic.
Although scammers seem to find endless ways of creating pressure on individuals by using various measures, here are four common ways a scammer may use:
- Requesting immediate payment: The real IRS will never demand immediate payment over the phone, through email, text, or social media. The only accepted payments are through official channels like IRS.gov or mailed checks. If you are being requested to send money through wire transfer, cryptocurrency, or gift cards, do not engage. This is not the IRS and is a scam.
- Creating pressure using threats: Manipulation tactics indicating punishment, immediate action being required, or legal enforcement will occur are scare tactics. The IRS would not conduct collections in this manner. You should be suspicious of threatening calls or messages as they are likely not legitimate.
- Promises of large refunds: A great way to attract people to enter their personal information is to promise ‘gold at the end of the rainbow.’ Attractive emails, text messages, and phone calls that indicate you will receive a large refund (you were likely not expecting) are a way for scammers to get you to provide your personal data. Don’t fall for it.
- Errors in grammar and suspicious links: Not just with refund and IRS scams, but with fraudsters using other tactics, spelling errors, and incorrect URL web links are a common occurrence. If communications to you contain errors, this is a red flag.
If you receive a message and are convinced that a request is legitimate, nothing is life or death. Pause and call your accountant or financial advisor to confirm the correct approach. If someone calls you, do not give them any of your personal information.
Remember, there is no urgency that exists that cannot wait regardless of what the person on the other end of the line is telling you. Stay safe during this tax season. Keep yourself protected by speaking with your trusted advisor.
