Tax scams abound year-round, but people over 65 are targeted even more frequently during tax season.

Why? A certain amount of money is in play at this time as taxpayers are figuring out what they owe Uncle Sam and scammers take advantage of the fact that money is being exchanged between the U.S. citizenry and its government. On April 15 we effectively settle the bill. People who owe more than they paid during the last year will receive a tax refund. Others who paid less in tax than they actually owe will be sending money to the government.

IRS tax form 1040 with pen and calculator.

Image source: Getty Images.

Many tax season scammers call you up and pretend to be from the Internal Revenue Service (IRS). Some insist that you owe taxes and even threaten you with arrest. Others attempt to obtain your personal information, such as your bank account numbers or Social Security number, even promising the information will be used to deposit a hefty tax refund in your account.

Older people have relatively higher net worth, on average, than younger folks. In fact, households headed by people between 65 and 74 have a much higher net worth than younger households, according to the U.S. Federal Reserve's triannual Survey of Consumer Finances. Households headed by people 75 and older have the highest net worth in the country, more than double that of households whose heads are 45 to 54 years old.

Older people are especially vulnerable to scams. Senior citizens living on a fixed income might be frightened by people demanding money from them. Seniors are also more likely to be home during the day and answer the phone when it rings.

Not all senior citizens are conversant with technology, either. Con artists use sophisticated technology that can spoof Caller ID and area codes to trick you into thinking the call is from the IRS. Some use email addresses that appear to be from the IRS until you hover your cursor over it. Older people may not realize that fraudsters can manipulate technology to make it look official.

But scams can be averted if you're knowledgeable about how the IRS actually operates and how tax scammers operate and then understand the difference. How can senior citizens protect themselves from tax scams? By being alert to these three signs that a fraud is afoot.

1. They contact you via phone, email, text, or social media.

Make no mistake. The IRS never contacts anyone initially by phone, email, text, or social media. Official notifications from the IRS that you owe taxes will arrive via U.S. mail. If you have an ongoing issue with the IRS, an IRS representative may call you to discuss your case, but an out-of-the-blue phone call, email, text, or social media messages to say you owe taxes is not from the IRS.

Never respond to any communication via phone, email, text, or social media that says you owe taxes or threatens legal action. Scammers can record your voice when you speak on the phone and use it to authorize payments. The best response is to hang up.

Emails and other messages purporting to be from the IRS or related government agencies may be phishing scams. Don't open any email or text attachments, either, which can be used to gain access to your data or harm your computer.

2. They demand immediate payment, sometimes in unusual ways.

Another feature of tax fraudsters? They demand immediate payment. The IRS will never do this. One of the reasons the IRS uses U.S. mail, is because you have the right to examine the documents indicating what you owe and to appeal if you don't agree. If you do legitimately owe the IRS, payment schedules can usually be negotiated.

To ensure they cna grab your cash and run, scammers often ask for credit card or bank account numbers. Never give these out over the phone or send them using email, text messaging, or social media.

Don't fall for an ingenious twist, in which scammers tell you about a tax windfall you're owed. You're blinded by the promise of unexpected money! In this scheme, they ask you to verify your bank account number or Social Security number. This may seem convincing, as fraudsters sometimes know part of these numbers. But guess what: Once you "verify" a number, they have it and they can try to drain your bank accounts or collect your Social Security benefits.

A new scamming innovation is to demand immediate payment from senior citizens via prepaid cards. That's right, scammers may ask you to fork over Apple iTunes or Google Play cards. Other common requests -- common enough for the government to have issued an alert about them -- are for Green Dot Prepaid Cards, MoneyPak Prepaid Cards, and Reloadit Prepaid Debit Cards.

Many fraudsters are involved in larger schemes in which their associates convert these untraceable prepaid cards into cash.

3. They threaten you with legal action.

The third dead giveaway of a tax scam is that it threatens recipients with immediate legal action. It could be jail or a fine, but in either case, senior citizens are threatened with a scenario in which they must pay immediately or law enforcement will become involved.

The real IRS never threatens immediate legal action if taxes aren't paid right away. Yes, it has the power to arrest folks for tax evasion and the power to garnish paychecks and place liens on property for payment of back taxes. But any such action is the end of a lengthy legal process in which the taxpayer has multiple opportunities to pay back taxes and fines in other ways. It does not happen suddenly and out of the blue. Plus, the prospect of any such action is announced in letters delivered to you through the U.S. mail.

If you are contacted by a fraudster purporting to be from the IRS, let the IRS know. Complaint forms can be found online here. Emails purporting to be from the IRS or the U.S. Treasury should be forwarded to phishing@irs.gov. Delete the email from your own computer. Stay safe out there this tax season!

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