Tax time a good time to be on the lookout for financial scams

Wednesday, January 30, 2013

Tax time is a good time of year to remember that older adults are high profile targets for financial exploitation and abuse. Research shows that as many as five million older adults are victims of elder abuse each year. Financial exploitation, also known as financial abuse, is believed to cost seniors an estimated $3 billion annually. It is a threat to the health, safety, dignity and independence of vulnerable older adults, but you can help prevent it from happening.

Tax-related scams and resources

Protect Your Pocketbook

This time of year, fliers, yard signs, emails and other advertisements offering tax preparation assistance and promising bigger, faster refunds are popping up everywhere. When you alone are ultimately responsible for the information on your tax returns, how do you separate the professionals from the scammers?

Regarding your tax refund, the following scenarios should be a warning sign:

  • You are approached by an individual or company who offers to prepare your taxes, and help you get a larger tax refund than other preparers. The preparer may even base his/her fee on a percentage of your refund.
  • The preparer may approach you at your church or in your neighborhood or housing complex. He/she may also contact you via email or through a flier or advertisement.

Even though they may not be required to file an income tax return, seniors are a prime target for tax scammers. They are led to believe they should file a return to receive social security rebates for excess withholding or that they are eligible for certain tax credits that could get them a refund.

The IRS`s Criminal Investigation Unit offers the following tips for avoiding tax preparation scams:

  • Be cautious of tax preparers who claim they can get larger refunds than other preparers, or who base their fee on a percentage of your refund.
  • Only use a reputable tax professional that signs your tax return and provides you a copy.
  • Consider whether the individual or firm will be around to answer questions about the preparation of the tax return months, or even years, after the return has been filed.
  • Check the preparer`s credentials. Only attorneys, certified public accountants (CPAs) and enrolled agents can represent taxpayers before the IRS in all matters including audits, collections and appeals.
  • Find out if the preparer is affiliated with a professional organization that provides its members with continuing educational resources and holds them to a code of ethics.
  • Ask friends and family whether they know anyone who has used the tax preparer before, and whether they were satisfied with the service they received.

Free tax-prep assistance

Many people qualify for free help in preparing their income tax return. Visit Council on Aging`s Help4Seniors Resource Directory for information.

Reporting Tax Frauds and Scams

If you think you are a victim of a tax scam, report it right away! 

Local Police Department: If you think you`ve lost money or your identity to a funeral arrangement scam, immediately contact your local police department to file a report.

Cincinnati office of the IRS Criminal Investigation Unit: (513) 263-3335

Resources for preventing financial exploitation

Last fall, the National Center on Elder Abuse and the Eldercare Locator (a public service of the U.S. Administration on Aging that is administered by the National Association of Area Agencies on Aging) partnered to produce a consumer guide, Protect Your Pocketbook: Tips to Avoid Financial Exploitation, to help older adults, caregivers and their families discuss and get informed about strategies to prevent financial exploitation. 

The guide includes tips for helping families identify warning signs or prevent of financial exploitation altogether, including:

Warning Signs 

  • financial activity that is inconsistent with an older adults past financial history; 
  • confusion about recent financial arrangements; 
  • changes to key documents that have not been authorized; 
  • a caregiver or beneficiary who refuses to use designated funds for necessary care and treatment of an older adult; 
  • and an older adult who feels threatened by a caregiver or another individual who is seeking to control their finances. 


  • Get an estate plan in place. Talk with an attorney about creating a durable power of attorney for asset management; a living will; a revocable or living trust, and health care advance directives.
  • Learn how to avoid fraud and scams at
  • Consult with a trusted person before making any large purchases or investments.
  • Do not provide personal information (i.e. Social Security number, credit card,ATM PIN number) over the phone unless you placed the call and know with whom you are speaking.
  • If you hire someone to help you in your home, ensure that they have been properly screened with criminal background checks completed. Ask for certifications when appropriate.

Families that are concerned about financial exploitation should report the issue to state agencies that deal with protecting the safety and well-being of older adults. In Ohio, scams can be reported to the Attorney General`s office.

For more information:

New York Times: On the alert for fraud

Protect Your Pocketbook Consumer Guide

Hamilton County Coalition to Prevent Fraud, Scams and Abuse

Butler County Crimes Against the Elderly Taskforce

Help4Seniors Resource Directory: Frauds, Scams and Abuse

Help4Seniors Resource Directory: Tax Prep Assistance