IRS Tax Tip 2018-188, December 6, 2018
Small businesses should be on-guard against a growing wave of identity theft and W-2 scams. Employers hold sensitive tax data on their employees ¨C such as Form W-2 data ¨C which is highly valued by identity thieves.
All employers are targets for the W-2 scam. This scheme has become one of the more dangerous email scams. Here¡¯s how it works:
- These emails appear to be from an executive or organization leader to a payroll or human resources employee.
- The message usually starts with a simple greeting, like: ¡°Hey, you in today?¡±
- By the end of the email exchange, all of an organization¡¯s Forms W-2 for their employees may be in the hands of cybercriminals.
- Because payroll officials believe they are corresponding with an executive, it may take weeks for someone to realize a data theft has occurred.
- Generally, the criminals are trying to quickly take advantage of their theft, sometimes filing fraudulent tax returns within a day or two.
This scam is such a threat to taxpayers that a special IRS reporting process has been established. Here¡¯s an abbreviated list of how a business should report these schemes. They should:
- Email [email protected] to notify the IRS of a W-2 data loss and provide contact information. In the subject line, type ¡°W2 Data Loss¡± so that the email can be routed properly. The business should not attach any employee personally identifiable information data.
- Email the Federation of Tax Administrators at [email protected] to get information on how to report victim information to the states.
- obÌåÓý a complaint with the . Businesses and payroll service providers may be asked to file a report with their local law enforcement agency.
- Notify employees. The employee may then take steps to protect themselves from identity theft. The Federal Trade Commission¡¯s provides guidance on general steps employees should take.
- Forward the scam email to [email protected].
More information:
- Taxes. Security. Together.
- Publication 4524 PDF, Security Awareness for Taxpayers
- Protect Your Clients; Protect Yourself
- Tax Security 101