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Many Adults Vulnerable to Tax Scams

New AARP survey finds that IRS impostors may target those unaware of common fraud tactics

shadowy hand reaching for a tax return

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Nearly 25 percent of respondents in an AARP survey didn't know whether gift cards can be used to pay taxes.

Consumers may be overestimating their ability to detect fraud, particularly scams involving taxes, according to a new AARP survey. Nine in 10 of the 1,005 adults who responded to the poll, conducted this month, said they were confident they could spot fraudulent schemes, and three of four said it's not too hard to recognize a scam. But when it comes to tax-related fraud and scams specifically, the responses from a quarter or more of those surveyed suggested they may not have the knowledge necessary to avoid falling victim to common schemes.

About 30 percent of those polled either didn’t know or weren’t sure if Internal Revenue Service agents may telephone taxpayers to warn of an arrest if back taxes aren’t paid immediately. This tactic is popular among scammers, but the IRS does not telephone or send emails to taxpayers.

Almost 25 percent of respondents also didn’t know or weren’t sure if the IRS accepts gift cards to pay taxes. This is another common strategy fraudsters use.

Nearly a quarter of respondents said they didn’t know or weren’t certain if someone else may use their Social Security number to file a tax refund under their name. False claims are, in fact, filed with alarming regularity. Notably, the IRS identified nearly 196,000 tax returns with more than $2 billion in fraudulent refund claims as of May 2017.

“We see repeatedly that scammers who impersonate the Internal Revenue Service work year-round at trying to swindle Americans, and they’re particularly relentless in April,” said AARP fraud expert Kathy Stokes. “While there’s no simple solution, you can outsmart cons. File your taxes early, before they beat you to it, shred financial documents you no longer need, and beware of high-pressure tactics. The IRS will not call and threaten arrest for taxes owed, and they certainly won’t ask for a gift card as a form of payment, but impostors will.”

AARP’s Fraud Watch Network offers tips and guidance on how you can protect yourself from tax-related scams.

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