Protect Your Parents – And Yourself – From These Tax Scams

A sampling of the IRS’ Dirty Dozen listing shows that boomers need to be vigilant – for both their parents, and themselves

Mar 22, 2014 at 10:00AM

Tax season seems to be scammers' favorite time of year, if the recently released IRS list of its "Dirty Dozen" tax scams is any indication. Perusing this announcement should be required reading for anyone, but particularly for baby boomers. Why? Because, according to the Federal Trade Commission, more of these fraudsters target seniors aged 65 and older – and are beginning to aim their scams increasingly toward boomers, as well.

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Source: Flickr / Images of Money.

For baby boomers charged with keeping an eye on their parents' affairs as well as their own, educating themselves about these rip-off artists is doubly important.

Here is a sampling of some of the more egregious cons making the circuit these days, along with some tips to avoid being sucked in.

Identity theft
This is a biggie, and has been getting oodles of press due to the hacking of credit and debit cards at big retailers like Target and Neiman Marcus. While this issue doesn't affect only older people, elders may not know about the issue, or be aware of how to protect themselves.

The IRS has a special website page regarding identity theft, which gives helpful protection advice. If you or your parents might have been victimized, you can prevent scammers from using your information to file a tax return in your name. Protect your tax rebate by printing the "Identity Theft Affidavit" Form 14039, filing it out, and sending it to the IRS.

Phone scams
Often targeting low-income filers and the elderly, fraudsters use various tricks to convince victims that they are the IRS in order to obtain social security numbers and other personal information. Some of these cons are extremely well-orchestrated, and use several people calling in sequence to bolster the claim that they are genuine IRS representatives.

Others pose as charitable entities, particularly in the days and weeks following some type of disaster. Often, these charlatans use names that closely resemble those of reputable organizations, and even set up phony websites to dupe victims. In addition to stealing your money, these persons may also request personal information from you, which may result in identity theft.

Tax preparer fraud
Another ruse involves tax return preparer fraud, especially prevalent this time of year. These swindlers impersonate tax professionals, and often advertise heavily in order to scoop up as many victims as possible. Often, these imposters will tell prospective "customers" that they have a refund due, when they do not. When the scammers procure the fraudulent refund, they keep it for themselves. In some cases, victims have lost Social Security and other benefits because of this type of fraud.

Others use tax preparation as a ploy to obtain personal identification to use in identity theft schemes. The IRS has a fact sheet that helps individuals safely choose a bona-fide tax professional, as well as other tip sheets and advice on the subject of tax fraud.

Keeping abreast of the latest scams can help you to keep your entire family safe from schemers looking to take advantage of the unaware. The U.S. government is an excellent resource in this regard, and is willing to educate all citizens about these issues – knowing full well, no doubt, that educated consumers are a scammer's worst nightmare.

Sick of high taxes?
Tax increases that took effect at the beginning of 2013 affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "How You Can Fight Back Against Higher Taxes," the Motley Fool's tax experts run through what to watch out for in doing your tax planning this year. With its concrete advice on how to cut taxes for decades to come, you won't want to miss out. Click here to get your copy today -- it's absolutely free.

Amanda Alix has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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