The Dirty Dozen


I could be talking about the 1967 movie featuring a large cast of famous actors playing convicted murderers who are recruited to handle a seemingly impossible task during the Second World War. But this morning I’m actually referring to a very informative list compiled every year by the Internal Revenue Service. I sometimes think their task of collecting money to operate the country is nearly impossible but it must be done if we’re going to maintain our highways, national parks, air traffic control system and the rest of our national infrastructure.


Every year, the IRS publishes a list of a dozen tax issues it has encountered in filed returns. This year, the number one issue is fake charities.


According to the website Balancing Everything, US citizens are by far the most generous in the world, giving twice as much as the next most generous country (Canada) and eight times that of first world-compatriots Germany. The downside of our generosity is that we are used to being asked and giving in return. Americans’ willingness to give is well documented, making us a prime target for scam artists from around the world. Scams related to charitable disaster relief proliferate, most recently scams associated with COVID.


Separating people from their money is extremely profitable so it’s unlikely to go away anytime soon. The most common approach is by phone. At our house, we receive calls which appear to be coming from a nearby town, perhaps even from our own telephone exchange. To help people avoid such calls, the phone companies began prefacing numbers on caller ID with [V] standing for Verified. Unfortunately, those who can fool the system about their location can also add that [V] so this level of protection didn’t last long. Our defense is to simply not answer calls from any phone number we don’t recognize and check for voicemails later.


One scam aimed at senior citizens is a scared voice that responds to the homeowner’s ‘hello’ by saying ‘Grandma?!’ (or ‘Grandpa’). If the grandparent answers using a grandchild’s name, the scammer is in business. The story is that the ‘grandchild’ is stuck far from home without money and needs an infusion of cash to get back. Grandparents are always asked not to tell parents to avoid recriminations. This is a sure sign of a scam and a perfect time to hang up.


Lest you think that younger generations are immune to scams, being a digital native can actually make someone more likely to be taken in. Our (tax-supported) Federal Trade Commission reports that those aged 18-24 were more than twice as likely to lose money to a scammer than those in the 65+ range. By the way, the FTC offers numerous resources for avoiding scams.


Why would younger folks be vulnerable? Well, those who’ve spent their lives online may be so at ease with technology that they don’t look twice to catch the slightly-altered (incorrect) web address or odd spellings that are common with scam emails and websites. Many younger people have pets and there are lots of scams directed toward pet owners. Even though the Humane Society’s website asks for donations multiple places on every page, they also publish suggestions about avoiding pet-related scams. Other scams targeted at younger consumers? Bogus employment offers, perhaps requiring some cash up front for processing fees, and student loan repayment scams.


As in any financial transaction, be sure you know who you’re really dealing with and check out the deal or offer. How likely is a grandchild to be kicked off a bus and stranded in Mexico or pet food to be available at 75% less than you paid last time? Late-night TV is full of ads offering to settle with the IRS for ‘pennies on the dollar’, something that might be appealing to someone of any age. In fact, the IRS’ own website provides the opportunity to settle your past-due tax payments directly with the Service.


Most of us figured out long ago that there’s no such thing as a free lunch. Whether the offer is for free financial planning services, unbelievably discounted pet products or the opportunity to help those in need via a phone app, caveat emptor is still the rule of the day. If you have questions about something that seems to be too good to be true, stop right there and ask for help from the Better Business Bureau, the FTC or a local, flesh and blood financial planner.