IRS Warns Payroll and HR to Watch Out for W-2 Scams

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The Internal Revenue Service (IRS) has alerted payroll and human resources professionals to beware of an emerging phishing email scheme that purports to be from company executives and requests personal information on employees.

This scheme has already caught several in its trap, as payroll and human resources offices mistakenly email payroll data including Forms W-2 that contain Social Security numbers and other personally identifiable information to cybercriminals posing as company executives. Criminal investigations are underway.

New Twist

“This is a new twist on an old scheme using the cover of the tax season and W-2 filings to try tricking people into sharing personal data. Now the criminals are focusing their schemes on company payroll departments,” said IRS Commissioner John Koskinen. “If your CEO appears to be emailing you for a list of company employees, check it out before you respond. Everyone has a responsibility to remain diligent about confirming the identity of people requesting personal information about employees.”

Criminals use stolen personal information and data such as Social Security numbers to try to obtain money, including filing fraudulent tax returns for refunds.

The criminals create a fake email pretending to be from a real high-level person within the company, for example, the chief executive officer (CEO). The “CEO” sends an email to a company payroll office employee and requests a list of employees and information including SSNs.

Sample Requests

The following are some of the actual requests contained in the emails:

• 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) as at 2/2/2016?

• I want you to send me the list of W-2 copy of employees wage and tax statement for 2015 [sic], I need them in PDF file type, you can send it as an attachment. Kindly prepare the lists and email them to me asap.

Phishing/Malware Surge

The IRS has sent out a number of warnings this tax season after seeing an approximate 400 percent surge in phishing and malware incidents and other reports of scams.

The emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. The phishing schemes can ask taxpayers about a wide range of topics. Emails can seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information.

To get assistance with reporting phishing and other online scams, visit the IRS website.

For more information on protecting personal, financial and tax data, see taxessecuritytogether for additional steps businesses and individuals can take.

Businesses that retain sensitive financial data also are encouraged to review and update their security plan. Publication 4557, Safeguarding Taxpayer Data, provides a starting point and recommendations from the IRS.

Staff Contact: Gail Cecchettini Whaley

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Gail Cecchettini Whaley
About Gail Cecchettini Whaley
Gail Cecchettini Whaley, employment law counsel/content, joined the CalChamber in June 2011 with nearly 20 years of practice in employment law. Since joining the CalChamber staff, Whaley has been chief author of the popular HRWatchdog blog and HRCalifornia Extra e-newsletter. She is a contributor and editor for CalChamber’s various human resources compliance products, including the HRCalifornia website, and serves as a content expert. She earned a B.A. with high honors from the University of California, Berkeley, and a J.D. from the University of Southern California.