Tax Tips: Don’t let scammers ruin holiday gift card giving
Taxpayers should watch out for gift card scams especially during the holiday season. The IRS never asks for or accepts gift cards as payment for a tax bill.
Common holiday scams
Scammers may try to trick taxpayers into falling for the gift card scam. With this scam, criminals may impersonate government or collections officials and send official-looking requests for gift cards to resolve an outstanding debt or issue. The scammer may ask the victim to purchase the gift cards from different stores to avoid the suspicion of store employees. Once the taxpayer buys the gift cards, the scammer will ask the taxpayer to provide the gift card number and PIN.
Scammers could also:
• Send emails that appear to be from a legitimate company but are not.
• Pose as an IRS agent and call the taxpayer stating that the taxpayer is linked to criminal activity.
• Threaten or harass the taxpayer by telling them that they must pay a fake tax penalty.
Find out more about how to avoid tax scams and fraud.
How to tell if it's really the IRS
The IRS will never:
• Call to demand immediate 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.
What to do if targeted by a scam
Anyone who has been a target of a scam should contact the Treasury Inspector General for Tax Administration to report a phone scam. Use the IRS Impersonation Scam Reporting webpage or call 800-366-4484. Taxpayers targeted by scams can also report to the Federal Trade Commission or visit their state attorney general.
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Tax Tips: Safety tips to remember during the holiday season and throughout the year
During the busiest time of the year for online shopping, the Security Summit reminds taxpayers of some important steps to protect themselves and their information from data thieves:
• Shop at online sites with web addresses that begin with the letters “https:” the “s” stands for secure communications. Also look for a padlock icon in the browser window.
• Don't shop on unsecured public Wi-Fi in places like a mall or restaurant.
• Ensure security software is updated on computers, tablets and mobile phones.
• Watch out and help protect the devices of family members who may not be technologically savvy, a wide range that goes from young children to older adults.
• Make sure anti-virus software for computers has a feature to stop malware, and that there is a firewall enabled to prevent intrusions.
• Use strong, unique passwords for online accounts.
• Use multi-factor authentication whenever possible
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Tax Tips: IRS provides transition relief for third party settlement organizations; Form 1099-K threshold is $5,000 for calendar year 2024
WASHINGTON — The Internal Revenue Service today issued Notice 2024-85 providing transition relief for third party settlement organizations (TPSOs), also known as payment apps and online marketplaces, regarding transactions during calendar years 2024 and 2025.
Under the guidance issued today, TPSOs will be required to report transactions when the amount of total payments for those transactions is more than $5,000 in 2024; more than $2,500 in 2025; and more than $600 in calendar year 2026 and after.
Notice 2024-85 also announces for calendar year 2024, that the IRS will not assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax during the calendar year.
TPSOs that have performed backup withholding for a payee during calendar year 2024 must file a Form 945 and a Form 1099-K with the IRS and furnish a copy to the payee.
For calendar year 2025 and after, the IRS will assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax.
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