Watch Out for Holiday Gift Card Scams

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There’s never an off-season when it comes to scammers and thieves who want to trick people into scamming them out of money, stealing their personal information, or talking them into engaging in questionable behavior with their taxes. While scam attempts typically peak during tax season, taxpayers need to remain vigilant all year long. As such, it is once again time to remind taxpayers that while gift cards make great presents for loved ones, they cannot be used to pay taxes.

Nonetheless, that doesn’t stop scammers from targeting taxpayers by asking them to pay a fake tax bill with holiday gift cards. Scammers may also use a compromised email account to send emails requesting gift card purchases for friends, family, or co-workers.

How the Scam Works:

  • The most common way scammers request gift cards is over the phone through a government impersonation scam. However, they will also request gift cards by sending a text message, email, or through social media.
  • A scammer posing as an IRS agent will call the taxpayer or leave a voicemail with a callback number informing the taxpayer that they are linked to some criminal activity. For example, the scammer will tell the taxpayer their identity has been stolen and used to open fake bank accounts.
  • The scammer will threaten or harass the taxpayer by telling them that they must pay a fictitious tax penalty.
  • The scammer instructs the taxpayer to buy gift cards from various stores.
  • Once the taxpayer buys the gift cards, the scammer will ask the taxpayer to provide the gift card number and PIN.

How to Know if it’s Really the IRS calling:

The IRS will never:

  • Call to demand immediate payment using a specific payment method such as a gift card, prepaid debit card, or wire transfer. Generally, the IRS will first mail a bill to any taxpayer who owes taxes.
  • Demand that taxpayers pay taxes without the opportunity to question or appeal the amount they owe. All taxpayers should be aware of their rights.
  • Threaten to bring in local police, immigration officers, or other law enforcement to have the taxpayer arrested for not paying.
  • Threaten to revoke the taxpayer’s driver’s license, business licenses or immigration status.

If You’ve Been Targeted by a Scammer:

  • Contact the Treasury Inspector General for Tax Administration to report a phone scam. Use their IRS Impersonation Scam Reporting webpage. They can also call 800-366-4484.
  • Report phone scams to the Federal Trade Commission. Use the FTC Complaint Assistant on FTC.gov. They should add “IRS phone scam” in the notes.
  • Report threatening or harassing telephone calls claiming to be from the IRS to phishing@irs.gov. Please include “IRS phone scam” in the subject line.

 

Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, we would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services.