Gift cards are a convenient option people use every holiday season. It makes sense: these cards allow you to give a gift to someone you care about without running the risk of giving them something they don’t like. However, gift cards are NOT to be used to make tax payments. Read on to learn how to identify, avoid, and report this type of scam.

How the Scam Works

Scammers often impersonate the IRS or other reputable institution and try to get people to pay fake tax bills with prepaid gift cards. This may sound absurd on its face (and it is), but a lot of people fall for this scheme every year, so it’s better to be prepared.

Criminals prefer gift cards because they are difficult to trace or recover when the transaction has been completed. So once you have provided them with the information they need, it’s very difficult to get your money back.

Pay Attention to These Red Flags

These are some red flags that can help you identify scammers using this scheme:

• The contact you unsolicited either by phone, email, text, or social media.
• Scammers may tell you that you are somehow linked to illegal activity (for example, that your identity has been stolen and used for fraudulent purposes).
• They use threats and/or harassment to get you to pay a fake tax penalty.
• They instruct you to buy gift cards from different stores.
• Once you buy the gift cards, they ask you to provide the gift card number and PIN.

How to Report a Gift Card Scam Attempt

If you believe you have been targeted by scammers, you can use the IRS Impersonation Scam Reporting website or call 800-366-4484.

In the case of phone scams, you can report them to the Federal Trade Commission, making sure to add “IRS phone scam” in the notes.

If you receive threatening or harassing phone calls, you can report them directly to the IRS to phishing@IRS.gov, including the phrase “IRS phone scam” in the subject line.

More Tips About Taxes

Learning more about the options available to you as a taxpayer is more important than ever. Check out these previous posts for more useful tax tips:

• These are some expenses educators can deduct from their taxes
• 3 Tools you need after filing your taxes
• Keep in mind these ideas when you file your taxes
• We debunk 4 common myths about tax returns
• Don’t forget this essential step if you are starting a new business

Contact the Experts at JT Tax Services

Looking for expert, dependable advice on taxes? At JT Tax Services we have the experience, the knowledge, and the drive to assist you. We give you the peace of mind that comes with knowing that you are limiting your liability while staying compliant with all regulations.

We are located in Oxnard, California. Contact us today by email, telephone, or through our social media accounts on Facebook, Twitter, and LinkedIn to learn more about our services.