Jessica Tyner  |  March 25, 2014

Category: Consumer News

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trusts, retirement, annuitiesThe Internal Revenue Service issued its annual “Dirty Dozen” list of tax scams, cautioning taxpayers to protect themselves against a wide range of schemes this tax season.

“Taxpayers should be on the lookout for tax scams using the IRS name,” said IRS Commissioner John Koskinen. “These schemes jump every year at tax time. Scams can be sophisticated and take many different forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues.”

Making the 2014 Dirty Dozen Tax Scams list is “misuse of trusts,” which includes the improper use of private annuity trusts.

While the IRS points out that there are “many legitimate uses for trusts” and can be a great way to manage estates and protect assets, misusing them can be all too easy. Some people use them for tax evasion or to drum up fake deductions, but others are designed by con artists to trick honest people out of their hard earned money.

There are actually a number of ways annuities and life insurance policies can be considered scams and it’s important to be aware of the red flags. Phishing, when people steal or attempt to steal someone’s financial information via fake emails or websites, also made the list. Typically, the scam artist tries to convince the victim to give up personal information or to install malware that will steal that information. This can be used to kickstart illegal annuity activity in some cases.

As a reminder, the IRS warns that the agency doesn’t communicate with taxpayers in any form except mail. Unsolicited emails can be a red flag, even with annuities. For example, if you get a pitch from a company you didn’t initiate contact with promising a great policy, steer clear. Depend on a financial advisor that you’ve initiated contact with to help you financially prepare for the future.

It’s no surprise that identity theft tops the list, and this can be another avenue for annuity fraud. This happens when someone obtains and uses your personal data without your permission. Often, annuity schemes target the elderly or other vulnerable populations. Stolen or misused data can lead to a lot of trouble, and identity theft doesn’t always involve a stranger who took off with your information and opened a new credit card to go on a shopping spree. It can happen with policies like annuities, too.

Telephone scams, which also made the list, is yet another route for potential annuity fraud. Scammers know the elderly are more prone to answering and being persuaded via phone than with email. They might pretend to be financial or life insurance agents, promising the moon.

Do You Suspect Annuity Fraud?

Do you believe you or someone close to you has become an annuity fraud victim? If so, you might qualify for an annuity fraud legal claim. Learn more at the Life Insurance Claims Lawsuit & Annuities Fraud Class Action Lawsuit Investigation. Once your information has been submitted, a lawyer will contact you if you qualify for a free annuity fraud claim review.

 

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