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Sharp Increase in E-Mail Scams Targeting Employee W-2 Forms During 2017 Filing Season

Aug 31, 2017 11:24:09 AM

The IRS notes that there has been a recent increase in e-mail scams targeting employee W-2 forms. The IRS says that this W-2 scam, called a business e-mail compromise (BEC), is one of the most dangerous phishing e-mail schemes trending nationwide. ABEC occurs when a cybercriminal ‘‘spoofs’’ or impersonates a company or organization executive’s e-mail address and targets a payroll, financial, or human resources employee with a request. For example, fraudsters will try to trick an employee into transferring funds to a specified account, or into requesting a list of all employees and their W-2 forms.

In 2017, the IRS saw the number of businesses, public schools, universities, tribal governments and nonprofits victimized by the W-2 scam increase from 50 to 200. Those 200 victims translated into several hundred thousand employees whose sensitive data was stolen. Employee information (e.g., name, address, SSN) was used to file fraudulent tax returns. It can also be posted for sale on the Dark Net, where criminals seek to profit from these thefts.

There is a special e-mail notification address (dataloss@irs.gov) for businesses and organizations to report W-2 thefts to the IRS. Businesses and organizations should be sure to include ‘‘W-2 scam’’ in the subject line and include point of contact information in the body of their e-mail.

Tax professionals may take several preventative steps to not fall victim to this scam. They include: (1) confirming requests for W-2 forms, wire transfers, or any other sensitive data verbally, using previously-known telephone numbers listed in the e-mail; (2) verifying requests for location changes in vendor payments and requiring a secondary sign-off by company personnel; (3) educating employees about the scam; and (4) consulting with an IT professional and following safeguards recommended by the FBI.

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