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Scammers Pose as IRS Agents — Demanding Gift Cards as Payment

Get advice on how to identify and handle imposter fraud

Woman handing a gift card to merchant

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Adapted from Scam Me If You Can (Portfolio–Random House/AARP) by Frank Abagnale

En español | When Megan Murfield, then 40, answered a phone call in early 2018, two people were on the line: a woman and a man, both claiming to work for the Internal Revenue Service. “They said I owed $2,085 in back taxes and that if I didn't put 50 percent down, I was going to go to jail,” Megan says. The woman told her, “We have never gotten a response from you, so it has been considered an intentional fraud, and a lawsuit has been filed under your name by the United States government.” The man said, “The arrest warrant is released on your name."

“I was scared,” Megan recalls. She walked to a nearby Walgreens and did as the IRS “agents” instructed: She bought a gift card. She then scratched off the strip to reveal the numbers on the back and read them to the scammers over the phone. “The man told me I had to go back into the store and buy more cards,” she says, her emotions still raw almost a year later. “I kept telling him how cold it was outside, and he'd just say, ‘That's OK, ma'am — just keep scratching off and reading the numbers to me.’ “

The man kept her on the phone the whole time, warning her not to tell anyone why she was buying so many cards with cash. In all, she bought $650 worth of gift cards, not the amount originally demanded but enough to appease the crooks.

Megan was so frightened that she called one of her coworkers to tell her she might not make it to work the following Friday because she was going to be arrested for tax evasion. After hearing the story, the coworker said she was worried her friend was being scammed. Megan then realized what had happened to her. The scammers had gotten her “under the ether,” as the condition is known among con artists — that heightened emotional state where you're unable to think clearly or make rational decisions.

But it was too late; her money was gone for good.

The Lessons

This is a classic impostor fraud; it's rampant in America right now, and older Americans are often targeted because they are more likely to answer the phone and be trusting of the “authority” on the other end. But foiling these phone frauds is relatively easy, as long as you know how the federal government — and most scammers — operate.

  • The IRS doesn't notify people of tax issues by phone until it has sent written communications, usually multiple times. So just hang up if you receive an unexpected call from someone claiming to be an IRS agent or representative.
  • The IRS and its collection agencies don't accept payments via gift cards — period. If anyone claims to be from a government agency and asks you for a payment using a gift card, this is without doubt fraudulent.
  • Government agencies don't make idle threats such as saying they'll freeze your assets, revoke your driver's license or change your immigration status. If you have legitimately broken tax law, the government will follow due process, meaning there will be letters and in-person hearings.
  • The IRS doesn't send out unsolicited emails or ask for detailed personal and financial information via email. Delete emails purporting to be from the IRS, and don't click on links.

AARP’s Fraud Watch Network can help you spot and avoid scams. Sign up for free Watchdog Alerts, review our scam-tracking map, or call our toll-free fraud helpline at 877-908-3360 if you or a loved one suspect you’ve been a victim.