W-2 and Tax Scams

In 2017, approximately 30% of all reported data breach incidents were related to the theft of W-2 information, which was likely used for tax fraud. -IRS

It is that time of year again, tax time! Every year thousands of people fall victim to tax scams. Criminals use many tactics to fool individuals, payroll and tax professionals.

We’ve highlighted just of the ways you can avoid tax identity theft and scams:

  • We know it’s hard, but it is best to file your tax return as early as possible.
  • Only use a secure internet connection to file electronically, or mail your tax return directly at the post office.
  • Never respond to emails, texts, or social media communications claiming to be from the IRS. The IRS initiates most contacts through regular mail delivered by the United States Postal Service. However, there are exceptional circumstances in which the IRS will call or come to a home or business. Learn how to identify if an individual calling or at the door is genuinely from the IRS.
  • Never provide personal information to anyone purporting to be an IRS representative who contacts you via an unsolicited telephone call. Instead record the caller’s name, badge number, and a call back number. Hang up and then contact the IRS at 1-800-366-4484 to determine if the caller is an IRS employee with a legitimate need to contact you. Also, remember that the IRS will never call demanding immediate payment of taxes owed or a specific method of payment, such as a prepaid debit card, gift card, or wire transfer.
  • Monitor your credit report to verify there is no unauthorized activity.
  • Enroll in the IRS Identity Protection Pin (IP PIN) program to obtain a 6-digit pin.

In addition to the tips above, it is essential to be familiar with common and recent scams to learn how to avoid them. We’ve highlighted some of the latest scams below to be on the lookout for.

  • An IRS phone scam is being reported targeting individuals in New Jersey.

    How the scam works
    In this scam, the criminal calls pretending to be an IRS representative and claims the victim owes tax money, demanding immediate payment. If the victim refuses to pay, the scammer threatens to send the police to their home. If the victim still does not pay and ends the call, the criminals spoof the victim’s phone number to call law enforcement to file a false report of an emergency or threat of violence at the victim’s home to prompt immediate law enforcement response. This tactic is called “Swatting”.

    What you can do to protect yourself
    Unfortunately, this threat cannot be completely avoided. Once targeted do not make the payment and call your local law enforcement after the threat is made. If law enforcement does arrive at your home as a result of the criminals swatting threat, remain calm and follow all of law enforcement orders, keeping your hands empty and visible until the situation is resolved.

    Where can you get more information on dealing with scam calls

    NJCCIC Cyber Blog

  • The U.S. Internal Revenue Service issued a reminder warning to all employers about an email identity-theft scam that spoofs emails from senior management, payroll or human resource departments to trick employees into revealing sensitive information such as their W-2 forms.  Scammers are targeting schools, nonprofits, and other organizations.

    How the scam works
    The cybercriminal will send an email that appears to be a legitimate company executive or department requesting information similar to the following:

    • “Kindly send me the individual 2016 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).”
    • “I want you to send me the list of a W-2 copy of employee’s’ wage and tax statement for 2016; I need them in PDF file type, you can send it as an attachment. Kindly prepare the lists and email them to me asap.”
    • A variation of the scam may also ask that funds be wired to a certain account.

    What can you do to protect yourself

    Remember that when you receive sudden requests like this, they may be spoofed emails and that you should double check their authenticity with the requestor or your supervisor.

    Report Phishing scams marking mail as Phishing in Gmail. For more details, please visit our page on Phishing.  If you’re not sure, contact  [email protected]. The IRS encourages taxpayers to send suspicious emails related to tax fraud to its [email protected] email account or to call the IRS at 800-908-4490.