Senator Collins Warns Seniors to Beware New Tactic in the IRS Scam: Ruthless Scammers Are Now Demanding Payment in the Form of Gift Cards

Washington, D.C.—U.S. Senator Susan Collins, the Chairman of the Senate Special Committee on Aging, is warning of a new variation of the pernicious IRS impersonation scam.  According to the U.S. Treasury Inspection General for Tax Administration, iTunes and other gift cards are now the primary form of payment demanded by con artists pretending to be IRS agents. 

Scammers telephone victims, impersonate an IRS agent, and demand payment for allegedly unpaid taxes. The callers frequently threaten victims with arrest, foreclosure, or other adverse legal action.  Scammers often instruct their victims to pay using a money wire or prepaid debit card.  In the past several weeks, however, the Inspector General, has learned that IRS impersonation scammers increasingly are demanding payment in the form of iTunes or other gift cards.  Once these con artists have the numbers on the back of the activated gift cards, they can either use the cards for purchases or resell the cards to third parties online.  A recent Portland Press Herald article detailed how a resident of Kennebec County lost $1,000 in iTunes gift cards through a similar impersonation scam.

“This most recent variation of the IRS impersonation scam demonstrates that these fraudsters are relentless in their desire to rob our nation’s seniors of their hard-earned savings,” said Senator Collins.  “Putting a stop to such aggressive and ruthless scams is among my highest priorities as Chairman of the Aging Committee.  Hundreds of seniors in Maine and across the country have contacted the Committee’s Fraud Hotline to report that they have received these calls.”

With such scams reaching epidemic proportions across the country, the IRS has released several tips to help taxpayers identify suspicious calls that may be part of a scam:

• The IRS will never call a taxpayer to demand immediate payment, nor will the agency call about taxes owed without first having mailed a letter to the taxpayer.
• The IRS will never demand that a taxpayer pay taxes without giving him or her the opportunity to question or appeal the amount claimed to be owed.
• The IRS will never ask for a credit, debit, or gift card number over the phone.
• The IRS will never threaten to send local police or other law enforcement to have a taxpayer arrested.
• The IRS will never require a taxpayer to use a specific payment method for taxes, such as a prepaid debit card or gift card.

Last year, Senator Collins chaired a hearing at which the Inspector General testified that this scam was “the largest, most pervasive impersonation scam in the history of the IRS.”  Senator Collins advises seniors to simply hang up the phone if they receive an unexpected call from someone claiming to be from the IRS.  In addition, complaints can be made to TIGTA (1-800-366-4484), the FTC (1-877-382-4357), or to the Senate Aging Committee’s Fraud Hotline (1-855-303-9470).

According to the Government Accountability Office, seniors lose an estimated $2.9 billion to financial exploitation and fraud every year.  Earlier this year, Senator Collins unveiled a comprehensive anti-fraud resource guide titled, “Fighting Fraud: U.S. Senate Aging Committee Identifies Top 10 Scams Targeting Our Nation’s Seniors.”  The IRS imposter phone scam was listed as the #1 most prevalent fraud.