The IRS has issued its fourth reminder as part of “National Tax Security Awareness Week”, urging small businesses and employers to avoid identity theft by watching out for W-2 scams that often surge during the filing season. Identity thieves have long made use of stolen Employer Identification Numbers (EINs) to create fake Forms W-2 that they would file with fraudulent individual tax returns. Now, they are using company names and EINs to file fraudulent returns.
In addition, the Service advised businesses, partnerships and estate and trust filers to be cautious of potential identity theft and contact the IRS if they experience any glitches with the filed returns. The Federal Trade Commission (FTC) maintains a Protecting Small Business page, which includes a series on cybersecurity, and a Cybersecurity for Small Business publication, which helps small businesses looking for a place to start on security. Moreover, elaborating on the W-2 scam, the IRS urged employers to educate employees, especially those in human resources and payroll departments who are often the first targets. Further, employers should put protocols in place for sharing sensitive employee information such as Forms W-2. In case of an incident, employers are urged to report it by adopting the following measures:
(1) email firstname.lastname@example.org to notify the IRS of a W-2 data loss and provide contact information;
(2) email the Federation of Tax Administrators at StateAlert@taxadmin.org to get information on how to report victim information to the states;
(3) businesses/payroll service providers should file a complaint with the FBI’s Internet Crime Complaint Center (IC3.gov);
(4) notify employees so they may take steps to protect themselves from identity theft. The FTC’s www.identitytheft.gov provides guidance on general steps employees should take; and
(5) forward the scam email to email@example.com.
For more information, taxpayers may visit the “Taxes. Security. Together.” awareness campaign or review Publication 4524, Security Awareness for Taxpayers. Finally, tax professionals are advised to get more information through the Protect Your Clients; Protect Yourself campaign as well as the Tax Security 101 series.
IR-2018-243Tax Tip 2018-188—Employers should be aware of W-2 scam, protect employee information