As the April 15th tax deadline approaches, protect your business from tax scammers trying to obtain employee and business information for financial gain. Although these scams are present all year round, they are particularly prevalent during tax season. Here are some scams to watch for so you can keep your business secure:
W-2 Scam
A cybercriminal poses a company executive, finance employee or contractor to gain access to employees’ W-2 forms. They will usually contact an employee from the payroll, Human Resources or accounting department. The cybercriminal may also ask for other personal employee data such as social security numbers, addresses and salaries. After receiving sensitive employee tax information, they will use the forms to file fraudulent tax returns.
With a scam like this, your employees are a critical point of defense. Make sure your entire office is trained and follows the best practices on information security due diligence.
Best Practices:
- Don’t give out personal employee information unless you are certain of the recipients’ identity
- Pay attention to the spelling and grammar of the communication and refrain from clicking on any links
- Review the policy regarding sharing confidential employee information
- Verify any emails requesting sensitive information
- Store/dispose of personal information properly
IRS Impersonation
A fraudster impersonates an IRS agent in order to gain company information or move money. The fake IRS agent may make a variety of different claims, including, that your business owes taxes, you need to provide missing information or pay an outstanding bill.
Please note: The IRS doesn’t initiate contact with taxpayers by email, text message or social media channels to request financial information.
Red Flags:
- Unsolicited Communication– As previously stated, the IRS won’t initiate contact with you via email, text or social media so verify the legitimacy of any unsolicited communication with the IRS directly.
- Threats or Intimidation– In order to get you to comply, scammers will use urgency and might threaten you with arrest, deportation, legal action or additional penalties. If this happens, report it to the IRS immediately.
- Payment Requests– Cybercriminals will often request payment through suspicious methods such as gift cards, pre-paid debit cards, wire transfers or cryptocurrency because they are difficult to trace and recover. The IRS only uses checks or credit cards.
Dishonest Tax Return Preparer
A scammer poses as a tax preparer to steal sensitive information and file false and inflated income tax returns. It is critical that you validate a tax preparers credentials before you choose to select and work with one.
Warning Signs:
- You are asked to sign a blank or partially filled out tax return
- They promise a large refund
- You aren’t asked to prove deductions
- They don’t have a prepared tax identification number
- You don’t receive a copy of your return
- They charge fees based on a percentage of the refund
How to Avoid Falling Victim to a Tax Season Scam
All three of these scams are variations of phishing, which is when a criminal sends fraudulent emails that appear to be from a known sender to trick you into replying with personal information, clicking a malicious link or downloading a malicious file. Red flags you and your employees should look out for include:
- Suspicious attachments or unusual URL links
- Spelling and grammatical errors in the message
- Apparent typos in the sender’s email address, such as taxrefond@irs.gov
- Urgent demands or the use of threats and intimidation to get you to comply
And although phishing specifically refers to communication via email, it is important to note that these tax scams can also originate from a fraudulent phone call, text message or social media. To safeguard your business from tax season scams:
- Do not open the attachments or click on any links in emails or text messages
- Confirm email requests via phone prior to fulfilling any requests
- Forward email messages or phone numbers that claim to be from the IRS to phishing@irs.gov
- Monitor your business accounts to ensure that all transactions posted are authorized and accurate
If you suspect your business has become a victim of fraud, call 1-781-444-2100 or your local branc
