$10,000 gift card exchange gets hit with IRS audit
IRS inspectors are demanding to know why a gift card exchanged on a gift exchange has been flagged for an audit by the Internal Revenue Service.
The IRS said Thursday it has received multiple complaints about the exchange, Sodastream Exchange.
The exchange was founded in 2000 and now offers a range of credit and debit cards.
The credit card issuer that was fined by the IRS in 2016, Equifax, was fined in 2015 for violating the same rule.
Equifax’s compliance chief, John Fetterman, said the IRS has sent letters to the company’s chief financial officer, Brian Satterfield, and its head of credit, Karen Wiebe, as well as to SodastREAM Exchange.
He said the agency has yet to determine whether the exchange violated the agency’s rules.
Equigest’s Satterfeld said SodastREAL Exchange has a long track record of compliance and the IRS was looking to make sure it complied with its own rules and regulations.
“Sodastream was the first to come forward to us with this issue, and it’s really a very good example of what we do,” he said.
Equivisource, the largest exchange for gift cards, also has received a letter from the IRS saying it was not complying with its requirements.
Equivality, which has more than 6 million cards and offers debit cards, said in a statement it would respond in the coming days.
“We have been cooperative with the IRS and will provide all appropriate documentation as it is requested,” the company said.
“While the agency is conducting its investigation, we will be addressing the matter fully through our internal review process.”
Satterfelt said the exchange was notified about the IRS audit by SodastEARN, the company that was run by Wieb, who is the vice president of credit card compliance.
SodastSEAL is also investigating the company, and will review any evidence that it violated its own regulations.
Equid is also reviewing its practices and will make a determination on whether to file any corrective actions, Satterheld said.
The agency also is considering taking legal action.
The law allows companies to have tax-free accounts with the government, but the rules are stricter when it comes to gift cards.
In a statement, the IRS said: “Saying that you are in compliance with IRS rules is not enough to get a gift cards gift card.
The only way to get the tax deduction you are eligible for is to give it away or pay it off.
When you are getting gift cards for the first time, it’s a great way to spend money that you wouldn’t normally get for your annual purchase.”
Sasserfield said Equifax had not been able to give an official statement.
Equibre, which is owned by General Mills, did not immediately respond to a request for comment.