After the the holiday season, gift card tax scams are common. Taxpayers should be aware of the tactics that thieves often use during this time of the year. Scammers pretend they are from Social Security or another government agency to steal your money or personal information.
Con artists will target taxpayers by asking them to pay a fake tax bill with gift cards. They may also use a compromised email account to send emails requesting gift card purchases for friends, family or co-workers.
Caller ID, texts, or documents sent by email may look official, but they are not. Be aware of gift card tax scams.
This scam is easy to avoid: The IRS never asks for or accepts gift cards as payment for a tax bill.
What to Watch Out For: Tax Gift Card Scams
Scammers usually request gift cards for tax bills 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.
- Scammers pretend to be from an agency or organization you know to gain your trust.
- Scammers say there is a problem with your Social Security number or account.
- Scammers pressure you to act immediately.
- Scammers tell you to pay in a specific way.
Fake IRS Agent
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 identify 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 to pay a fake tax bill.
Once the taxpayer buys the gift cards, the scammer will ask the taxpayer to provide the gift card number and PIN.
Here’s How to Tell If It’s Really the IRS Calling
The IRS will never:
- Call to demand immediate tax 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.
Social Security Scams
Also be aware that fraudsters are calling to verify information about the 2023 cost-of-living adjustment for people who get social security benefits.
Remember, this cost-of-living adjustment is automatic and a beneficiary does not need to verify anything.
Social Security won’t ask you to provide information or money to get your benefit increase. The Social Security Administration may email or text you about programs and services, but you’ll never be asked for personal information via email or text.
Report Tax Scammers
- Contact the Treasury Inspector General for Tax Administration to report a gift card tax phone scam. Use their IRS Impersonation Scam Reporting webpage. They can also call 800-366-4484.
- Report phone scams to the Federal Trade Commission.
- Report threatening or harassing telephone calls claiming to be from the IRS to firstname.lastname@example.org. People should include “IRS phone scam” in the subject line.
Our team is here for you. You should keep your accountant informed of any attempts to contact you with regard to taxes or the IRS.
If you have questions, reach out to us at 314-961-1600 or contact us to discuss your situation.
To check out our other articles on business topics, click here.
Alan Dierker is a Tax Manager with experience in tax, outsourced controller services, including fulfilling compilation and preparation agreements, payroll and compliance issues. He also has experience in the following industries: Wholesale Distribution, Private Foundations, Not-for-Profit and Real Estate.
About Smith Patrick CPAs
Smith Patrick CPAs is a boutique, St. Louis-based, CPA firm dedicated to providing personal guidance on taxes, investment advice and financial service to forward-thinking businesses and financially active individuals. For over 30 years, our firm has focused on providing excellent service to business owners and high-net worth families across the country. Investment Advisory Services are offered through Wealth Management, LLC, a Registered Investment Advisor.