Slideshow Preventing W-2 tax fraud

Published
  • February 14 2017, 3:07pm EST
6 Images Total

Form W-2 Wage and Tax Statement

The IRS is warning tax professionals and taxpayers about the latest iteration of a tax season scam.

Bank wire transfers

The W-2 scammers are combining their efforts to steal employee W-2 information with an older wire transfer scheme so they can victimize some organizations twice.

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Report scams to the IRS

When employers report W-2 theft incidents immediately to the IRS, the IRS can take steps to help protect their employees from tax-related identity theft.

Email spoofing

Cybercriminals use email spoofing techniques to disguise a message so it appears to come from an executive at the organization. The email is sent to an employee in the payroll or human resources departments asking for a list of all employees and their Forms W-2. This scam is sometimes known as business email compromise (BEC) or business email spoofing (BES).

The scam is spreading

The Form W-2 email phishing scam, which first appeared last year, is circulating earlier in the tax season and has now evolved beyond the corporate world and is reaching other types of organizations, including school districts, tribal casinos, nonprofits, chain restaurants, temporary staffing agencies, healthcare and shipping and freight. Those businesses that received the scam email last year also report receiving it again this year.

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Email follow-up

In the latest twist to the scam, cybercriminals are following up with an “executive” email to the payroll department or comptroller, asking that a wire transfer also be made to a certain account. Although this part of the scam is not tax related, the wire transfer scam is being coupled with the W-2 scam email. Some companies have therefore lost both their employees’ W-2 forms and thousands of dollars from wire transfers.