Scam Alert: IRS Warns of Scammers Asking for Gift Cards for Tax Payments
‘Tis the season — for financial scams of all kinds, when hackers and thieves attempt to separate well-meaning, hard-working people from their money.
See: IRS Offers Advice on How You Can Avoid Being Scammed This Holiday Season
Find: The Biggest Money Scams of All Time
It may also be the time of year when taxpayers are trying to get caught up on unpaid back taxes to start fresh in 2022. But there’s one thing you should keep in mind if you’re planning to settle a tax bill this month: The IRS will never ask for or accept gift cards as payment for your federal taxes.
How Scammers Try To Collect Gift Cards from Taxpayers
Although this scam can happen year-round, it frequently occurs during the holiday season. The IRS recently released a notice to warn taxpayers about the scam.
Here’s how it works: Someone will call a taxpayer and pose as the IRS, asking for gift cards from a variety of stores as payment for a past-due tax bill. They might also send an email or text message, or even reach out through social media.
See: The Classic Cons Behind These Digital-Age Scams
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Sometimes, thieves make themselves and their phone call look even more authentic by leaving a voice mail with a call-back number. The message might say that the taxpayer’s account has been linked to criminal activity or that someone stole their identity. But the number isn’t an IRS office’s — it is the scammer’s.
If the unsuspecting taxpayer purchases the cards and calls the scammer back, they will be asked to share the gift card number and PIN so the scammer can use the card for online purchases.
How the IRS Actually Collects Unpaid Taxes
If you have unpaid taxes, you are probably well aware of your tax debt. It’s important to pay the past due amount as soon as possible or call the IRS to negotiate a settlement or payment plan.
See: Can’t Pay Your Tax Bill? The IRS Can Reduce Your Debt With an Offer in Compromise
Find: Tax Brackets 2022 — How Much Will You Pay Based on Latest IRS Inflation Adjustments?
If you are blindsided by a phone call, it’s probably not the IRS. If you owed back taxes, you would first receive a letter, or a CP501 notice, from the IRS explaining the balance, including penalties and interest. Upon receiving this letter, you may be able to request a payment plan for up to 180 days.
If you ignore your first letter, you’ll receive a series of letters, titled CP502 (Balance Due Reminder Notice), CP503 (Second Reminder About Unpaid Taxes) and CP504 (Intent to Levy State Tax Refund or Other Property).
These letters will culminate with a CP90 form, which is your final, 30-day warning before the IRS can levy your assets or garnish your wages to collect what you owe.
See: Is Taking Out Loans To Pay Off the IRS a Good Idea?
Find: What Actually Happens If You Don’t Pay Your Taxes
How To Know You’ve Been Scammed
If someone contacts you by phone, text or social media demanding immediate payment of a tax bill, it is a scam. The IRS follows the process outlined above to collect unpaid taxes. Additionally, taxpayers have a right to question or appeal the amount of the tax bill.
Additionally, according to the IRS website, the IRS will never threaten to:
Bring in law enforcement to arrest the taxpayer for non-payment
Revoke your driver’s license, business license or immigration status for non-payment of taxes
Scammers, on the other hand, may harass you or threaten to have you arrested if you don’t comply.
See: 5 Common Reasons Why You Might Owe Taxes This Year
Find: 11 Tips for Dealing With Back Taxes
What To Do If You Are a Victim of Fraud
If you believe you’ve been targeted by a scammer — even if you didn’t fall for the scheme — you should immediately contact the Treasury inspector general for tax administration through the IRS Impersonation Scam Reporting Page. You can also call 800-366-4484.
Additionally, you can file a report with the Federal Trade Commission, using the FTC Complaint Assistant. Include the words “IRS phone scam” in the notes.
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This article originally appeared on GOBankingRates.com: Scam Alert: IRS Warns of Scammers Asking for Gift Cards for Tax Payments
