The IRS Says Watch Out for Gift Card Scams During Christmas

Mark Hake

The IRS says there is a common scam during Christmas. They say that during the holiday season, you should be aware there are gift card scams thieves commonly use this time of year.

This is the IRS Tax Tip 2022 - 181: "Taxpayers shouldn't let gift card scammers ruin the holidays."

"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."

The IRS details how the scams often work. For example, the typical way scammers request gift cards is through the phone by impersonating a government official.

However, they can also use text, email, and social media to request a gift card. Here is how the scam works:

  • 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.

Next, they demand payment as a result of the criminal activity, despite the fact that the person they are calling has supposedly been victimized.

  • 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.

The IRS says it will never demand payment through a specific method like gift cards. Gift cards now are a sign that you are likely being scammed and you should never comply with a request for gift cards, no matter what the logic used to justify it.

The IRS has its own Scam investigation and reporting page. In addition, the IRS makes these statements on this page:

"The IRS will generally first contact people by mail, not by phone, about tax-related matters."
"If the IRS does contact you by telephone, they will not insist on any prepayment using i-Tunes card, gift card, pre-paid debit card, money order or wire transfer."
The IRS will never request personal or financial information by email, text, letter, or any social media."

This way you know that there is a scammer on the line or by phone with you - if any of the policies above are violated.

For example, if the person on a text or email requires your social security number you will know that he is not an IRS agent. This does not mean that if you call the IRS yourself they may not require your SSN on the phone.

There are ways to contact the government if you think you are being scammed. For example, here is what the IRS says you can do:

  • 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. People should include "IRS phone scam" in the subject line.

****************************

Don't forget to hit the "Thumbs up" button and also the "Follow" button below. You can also download the Newsbreak app to become a Registered Follower. That way you can see all my prior articles. Click on the link underneath my profile name above.

Mark R. Hake, CFA, writes articles on national and local news, stocks, and market events at InvestorPlace.com, Barchart.com, Medium.com, and Newsbreak.com as well as TalkMarkets.

Comments / 2

Published by

Mark Hake is a financial analyst, investor, and Chartered Financial Analyst (CFA). He writes about US and foreign stocks as well as cryptos, hedge funds, and private equity. He previously ran his own hedge fund, investment research firm, and acted as CFO for a fintech startup. He focuses on finding value, arbitrage, and hidden asset opportunities.

Phoenix, AZ
13K followers

More from Mark Hake

Comments / 0