Call us at (816) 743-7700

Tax Season Expected to Bring New Surge of Phishing Scams

By MarksNelson on January 19, 2018 in Articles, Entrepreneurial Services

The IRS is strongly urging employers to educate their payroll personnel on phishing scams involving Form W-2. According to a statement from the agency,  more than two hundred organizations fell victim to the scam last year impacting thousands of employees.

How it works

In a W-2 phishing scam, cybercriminals send emails to a company’s employees — typically in payroll, benefits or human resources departments — that claim to be from the company’s management. The emails request a list of employees along with their W-2 forms, Social Security numbers or other confidential data.

Here are some examples straight from the IRS:

“Kindly send me the individual 2015 W-2 (PDF) and earnings summary of all W-2 of our company staff for a quick review.”

“Can you send me the updated list of employees with full details (Name, Social Security Number, Date of Birth, Home Address, Salary).”

If the employee responds, criminals can use this information to file fraudulent tax returns in the employees’ names, seeking refunds.

The scam is particularly nefarious because the employees it targets probably believe that, in complying with the emailed instructions, they’re doing exactly what they’re supposed to. Moreover, at first glance, the emails typically appear legitimate. Many contain the company’s logo and the name of an actual executive, typically captured from publicly available information.

The increasing number of such scams prompted the IRS to issue an alert in 2016: “IRS Alerts Payroll and HR Professionals to Phishing Scheme Involving W-2s.”

Education is key

While these scams have become more prevalent, businesses can take steps to reduce their risk. Because the scams target humans, rather than the technology itself, education is key. Inform all employees, and particularly those in areas that handle sensitive data, of the scams. Remind them not to click on links or download attachments from emails that were unsolicited or sent by those they don’t know.

Employees often are nervous about questioning a request that appears to come from upper management, so encourage employees to double-check any request for sensitive information, no matter who appears to be making it. They should do this not by responding to the email in question, but by talking with a trusted supervisor or colleague.

Don’t fall victim

Technology has a role to play as well. Install robust antivirus and spam filters and keep them updated. Along with education, the IRS is also urging employers to create a policy which limits the number of employees who have access to Form W-2 requests and create verification procedures to validate the actual request before emailing sensitive data.

Reporting scams

The IRS is asking businesses and organizations who receive a suspected phishing scam email to send the full email headers to and use “W2 Scam” in the subject line.

Reporting data loss

The IRS does have a special email address for employers to report Form W-2 data thefts. Below is a list of steps you need to take immediately after realizing you were scammed:

  • Email to notify the IRS of a Form W-2 data loss and provide contact information, as listed below.
  • In the subject line, type “W2 Data Loss” so that the email can be routed properly. Do not attach any employee personally identifiable information data.
  • Include the following:
  • Business name
  • Business employer identification number (EIN) associated with the data loss
  • Contact name
  • Contact phone number
  • Summary of how the data loss occurred
  • Volume of employees impacted

With sensible precautions in place and educating employees, businesses can reduce the risk of falling victim to W-2 phishing scams.

About the Author

MarksNelsonView all posts by MarksNelson
MarksNelson LLC works with clients to help safeguard and grow their businesses. Our ultimate goal is to help our clients to Move Forward. The firm provides Assurance, Accounting Services and Business Advisory, Business Valuation, Consulting, Cost Segregation, Employee Benefit Plan Audits, Litigation Support, Forensic Accounting, International Tax, State and Local Tax and Tax planning, advisory and compliance services. MarksNelson is a member of The Leading Edge Alliance, the second-largest international professional association of independently owned accounting and consulting firms, serving clients who need additional resources on a national or international level. MarksNelson has significant accounting and business advisory experience in the auto dealership, construction, insurance, manufacturing, distribution and real estate sectors. The firm was named among the 2014 Best Accounting Firms for Leadership Equity by the 2014 Accounting MOVE Project for its dedication to gender equity.