Tips To Avoid Tax Scams During the Upcoming Tax Season

tax scam

Elderly people are more susceptible to scams than other age groups, and tax season can be an especially challenging time. Tax scams are appearing with increasing frequency, and many of them target elderly people. You can prioritize your safety by learning about common tax scams and how to avoid them. Elderly people often hire others to prepare their taxes for them. There are many red flags to look out for when hiring somebody to prepare your taxes. 

Why Seniors Should be on High Alert for Scams During Tax Season

Seniors are targets for scammers. Filing taxes can be confusing no matter how old a person is, and scammers prey on that confusion.[1]

If you can learn to spot scams, you can better protect your finances and identity. Part of your financial protection during tax season should involve finding a trusted tax preparer. Unfortunately, several scammers will pose as IRS representatives in order to intimidate well-intended seniors. With an air of authority, scammers commit fraud by coercing seniors into divulging their personal, financial information. 

It may surprise some to learn that many seniors are unwilling to report instances of tax fraud or scamming. The victim might experience feelings of shame and guilt, which prevents them from coming forward about what happened.

What can you do to reduce your risk of getting stung by a tax scam? Seniors can protect themselves from unnecessary financial stress by knowing how to spot scams and setting up proper channels for tax preparation.

Red Flags That May Indicate a Tax Preparer Scam

Common tax scams include:

  • Emails or phone calls in which the scammer pretends to be the IRS and requests claim payments or offers to send a refund
  • Identify fraud in which a scammer will use your personal information to impersonate you and file for your tax refund

The IRS compiled a list of popular scams for people to look out for during tax season. This Tax Scams/Consumer Alerts page is a great resource for your tax protection research. In the meantime, keep an eye out for the following red flags to protect yourself from tax scams.

  • Refuse to use refund anticipation loans that have a quick turnaround time. If a preparer says they can process your refund on an accelerated timeline, they will usually charge a high loan interest rate or an additional fee[2]. When you pay for an accelerated timeline, it is not always clear what that timeline will actually be. You end up paying a fee for a service that has no output guarantee. A typical tax refund timeline is approximately 21 days if you file online and request that the money is deposited to your bank account. 
  • Stay vigilant throughout the entire tax process. Though it helps to file early, you are not exempt from fraud after you file. Scammers might call you and request that you provide your personal information in order to get an expedited tax refund. The IRS does not make personal calls, so you should be wary of anyone calling on behalf of the IRS. Keep an eye on your mail, as the IRS will communicate with you through a letter. 
  • Double check that your tax preparer has signed the form before you sign. They should sign above your name. This finalization includes not only their name, but their tax preparer identification number. If you do not have the tax preparer’s contact information, you might run into issues later on with the IRS if you need to get in contact with the preparer.
  • Never sign blank tax return forms. Take some time to look over your return before signing off on it. Ask your tax preparer about any deductions that look out of place to you. A legitimate tax preparer will do all of this with you, leading a session in which they will review the return with you, go over how the numbers were determined, and provide an opportunity for you to ask any lingering questions.
  • Have a clear understanding of how your tax preparer will charge their fee before you start the process of working with them. If the preparer charges a fee based on the refund you receive, that is an immediate red flag. A typical tax preparation office will charge a flat rate depending on how complex your return is. You could also pay a certified public accountant (CPA) or other tax professional an hourly rate for help with your tax planning and tax filing. 
  • Figure out how you will receive your refund. If you are planning on using direct deposit to get your tax refund, you should make sure a few key details are correct. Double check your bank account number and bank’s routing number are correctly displayed on your finalized return. 

If you suspect that you are working with a fraudulent tax preparer, make sure to file a complaint with the IRS. You will use a Return Preparer Complaint, or Form 14157. 

Tips For Finding a Reputable Tax Preparer

At this point, you might be wondering who you can actually trust to help with your taxes this year. There are several ways you can pinpoint a trustworthy tax preparer. 

First, you should figure out which part(s) of the tax planning and tax filing process you will entrust to a tax preparer. This might depend on how much money you are able to spend on tax preparation services. You can enlist the help of a tax preparer for filing a tax return, preparing financial plans, or representing you with the IRS in case of an audit.

Then, you can use these tips for finding a reputable tax preparer[3]:

  • Review a tax preparer’s credentials with the IRS’ directory of federal tax return preparers. You can use this resource to research tax preparers near you who have an IRS preparer tax identification number and determine which credentials they have, including annual filing season program participant, CPA, attorney, enrolled agent, or a different PTIN holder.
  • Find a CPA to represent you with the IRS if you are audited. A CPA goes through rigorous education, exams, and licensing to be able to support you. Use the AICPA’s Find a CPA tool to find a CPA near you. You can also work with an enrolled agent if you need help during an audit.
  • You can reach out to trusted family members or friends to help you decide on a tax preparer. A reliable outside perspective can filter out potential scams that you might not catch on your own. Also, someone you’re close with might have a great recommendation for a tax preparer they work with already. 
  • See if you are eligible for free tax help. You can use the Get Free Tax Prep Help tool from the IRS. The AARP Foundation Tax-Aide Program is another helpful resource for tax preparation.
  • Use the IRS Free File to file your taxes virtually. If your adjusted gross income was less than $72,000 in 2020, then you can file using this free resource. It uses popular tax preparation software to help you file.

In general, you should make sure to protect your personal information and get rid of important documents that hold sensitive information[4]. Make sure you have secure passwords for all of your online financial information. 

Medical Alert Systems Make Senior Safety a Priority 

As you put more effort into learning about tax scams, you will feel an increased sense of confidence and security. You should feel the same in other parts of your life. Falling can be a huge risk to seniors’ health and wellbeing, with 1 in 4 elderly adults falling at least once a year. Small changes can reduce your risk of falling and help you create a response plan in case of a fall or any other personal emergency. 

Safety is a key to comfort, and medical alert systems (also known as personal emergency response or PERS systems) can contribute to a greater sense of security. Alert1 provides 24/7/365 Command Centers with certified agents who are trained to respond to your call in any emergency situation, whether it be medical or otherwise.

How a Medical Alert System Fits into Your Budget

If you do not already keep a monthly budget, then preparing your tax information might put you in the mindset to do just that. A healthy understanding of your finances can help you make better day-to-day decisions. Alert1’s button alarms are available using different pricing options to suit every budget. 

You will not pay extra fees for multiple button pushes or “false alarms.” The point of a medical alert system is to increase comfort and security while reducing stress.

Which Medical Alert System You Should Choose?

Alert1 provides in-home, on-the-go, and fall detection emergency alert systems for seniors. Some seniors who live alone prefer to have fall detection technology in case they fall when no one is visiting. If you fall, fall detection technology can sense your fall and immediately send an alert to a 24/7/365 Command Center.

A great choice for more active seniors is the On-the-Go Wrist Watch Medical Alert + GPS + Pedometer. It has a built-in pedometer. You can also use it to check the weather. This model does not have fall detection, but you can choose an On-the-Go + Fall Detection medical alert system if you would like that feature. 

 

 

 

 

 



[1] Fields, Jessica. 2019, May 5. We are leaving older adults out of the digital world. TechChrunch.com. We are leaving older adults out of the digital world.

[2] Collins, Kelvin. 2022, Jan. 17. Better Business Bureau: Tips for trusting your tax preparer. The Union-Recorder. Better Business Bureau: Tips for trusting your tax preparer.

[3] Lankford, Kimberly. 2021, Apr. 9. How to Find a Reputable Tax Preparer Near You. U.S. News & World Report. How to Find a Reputable Tax Preparer Near You.

[4] Osterland, Andrew. 2019, Mar. 13. 4 tips to protect yourself against tax return fraud this year. CNBC.com. 4 tips to protect yourself against tax return fraud this year.