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Don’t be fooled by fake IRS calls or emails

The IRS is now accepting individual income tax returns. (Michael Nagle/Bloomberg)

The 2018 tax season officially opens today.

And with the season comes the scams.

One scam, which often targets seniors, just won’t die. It involves criminals pretending to be from the Internal Revenue Service and scaring people into sending them money for fictitious tax bills.

My godmother recently got such a call from a man who said he was calling from the IRS. He claimed that she owed back taxes and that if she didn’t pay she would be arrested. She immediately called me in a panic. Although she was pretty sure it was a scam, she still wanted to double-check.

I assured her it was not a legitimate call. The IRS will not call you and demand payment for a tax bill. Some scammers are even telling folks they have to pay the bill with bitcoin.

Please read: That is NOT the IRS Calling You!

The IRS issued a warning earlier this month to employers about another tax fraud scheme. In this phishing scam, cybercriminals con payroll personnel or other employees into disclosing payroll information.  The fraudsters send emails pretending to be executives requesting copies of W-2 forms for employees, which, of course, contain addresses, Social Security numbers, income and withholdings. The criminals use the information to file fraudulent tax returns or sell the data on the dark Web.

Read more: Tax Scam Alert: The IRS Just Issued a New Cybersecurity Warning

This week — Jan. 29 to Feb. 2 — is Tax Identity Theft Awareness Week. The Federal Trade Commission has partnered with a number of organizations to host a series of free webinars and Twitter chats to help get out the word about tax scams.

Here’s what’s happening this week:
Monday, Jan. 29, 2 p.m. The FTC and the Identity Theft Resource Center are co-hosting a webinar on tax-related identity theft and IRS impostor scams, their financial and emotional impact, how to protect yourself and how to recover if you become a victim.

Tuesday, Jan. 30, 2:30 p.m. The FTC, AARP Fraud Watch Network, AARP Foundation Tax-Aide program and the Treasury Inspector General for Tax Administration are hosting a webinar on tax identity theft and IRS impostor scams.

Wednesday, Jan. 31, 11 a.m. The FTC and the Department of Veterans Affairs are co-hosting a Twitter chat for service members, veterans and their families on how to minimize the risk of tax identity theft. Join the conversation at #VeteranIDTheft.

Thursday, Feb. 1, 3 p.m. The FTC and the Identity Theft Resource Center will co-host a Twitter chat about protecting yourself against tax-related identity theft by looking out for the warning signs of a scam. You can join the conversation using the hashtag #IDTheftChat.

Read more: Tax-Related Identity Theft

Grandparents, check if you’re eligible for this tax credit

If you’re caring for a grandchild, even if you’re 65 or older, be sure to check whether you qualify for the earned income tax credit (EITC), which was created to help those who work but have modest incomes.

The EITC is a refundable tax credit, meaning you can get money back even if you owe no tax or the credit is more than the amount of tax owed. Eligibility for the EITC is determined in part by how much you earn and the size of your family, specifically whether you have qualifying children in your household.

Read this tax tip from the IRS to see if you qualify for the EITC: Grandparents Caring for Grandchildren Should Check Their Eligibility for EITC

Retirement rants and raves
I’m interested in your experiences or concerns about retirement or aging.

This space is yours. It’s a chance for you to express what’s on your mind. Send your comments to Please include your name, city and state. In the subject line, put “Retirement Rants and Raves.”

Last week I asked folks about the experiences with having long-term care insurance in light of recent stories about huge premium hikes.

Read more: Millions Bought Insurance to Cover Retirement Health Costs. Now They Face an Awful Choice: Battered by losses, long-term-care insurers hit policyholders with steep rate increases that many never saw coming

Jo wrote, “My husband and I purchased a federal long-term care policy approximately 16 years ago (I was 53 and he was 56). The price was very reasonable. We received modest increases every two years with corresponding daily benefit amounts. Two years ago we were paying $240 a month for the two of us. Then a huge shock. Our policy jumped to $555 in 2016. As of the first of this year our policy is now costing us $644 per month. We are concerned that we will not be able to afford future increases after paying in tens of thousands of dollars.”

“Both my husband and I have had long-term care policies since 2003,” wrote Barbara Shaw of Boston. “I have a history of Alzheimer’s disease on my side although we are generally long-lived. My husband has several chronic conditions. Although it seemed an obvious choice and we have good policies with unlimited benefit terms, the premiums keep jumping. We now pay over $8,000 a year between the two of us. I am 72 and he is 61, so we could be looking at a number of years of premium increases. Our financial adviser tells us there is no way we could save enough to cover the cost of six or seven years in assisted living so to continue to scrape together the money for the premiums. But we’re not sure how much longer we can afford to pay for the insurance. I guess we should consider ourselves fortunate that the actuaries didn’t actually realize how many people would file claims and how much those claims would cost or we might have been paying significantly more right from the beginning. But as we age and get closer to the possibility of needing the coverage the choice to continue to foot the bill gets harder.”

Duncan Gray of Oxford, Miss., wrote, “I am 68 years old with long-term care insurance that I bought about 15 years ago. The rates held steady until three years ago when they began to rise. It has increased 25 percent, not bad from what I am hearing about other policies. My father and mother both had the same policy and, seeing how enormously helpful it was in their last years, I am very reluctant to drop the policy even as the rates continue to rise significantly.”

Rose Clayton from Rancho Mission Viejo, Calif., wrote that she and her husband own long-term care policies purchased in 2002.

“After 15 years of owning our policies, we received our first rate increase last year,” Clayton wrote. “Not a ‘skyrocket’ increase, it’s 24 percent spread out over three years. We own benefit-rich policies that give us excellent coverage and peace of mind. We bought it surprisingly cheap when compared to the cost of the exact same coverage being sold today.”

Clayton, who says she’s a long-term care insurance specialist, worries all the bad press about long-care insurance will deter people from buying needed coverage. When faced with a rate increase, there are some options policyholders should consider, she said.

“A policyholder has three choices — paying the rate increase; modifying their coverage to keep their premium the same, or even lower it; or, cancel the coverage,” Clayton wrote, “My experience with my clients has been that most have accepted the rate increase because they understand the value of what they have and the bargain price they originally paid for it. A few have modified their coverage and continued their protection. None have canceled their coverage due to a rate increase.”

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