“How to Protect Yourself and Your Company from W-2 Scams”

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Understanding W-2 Scams

Keeping your personal information safe is crucial to preventing identity theft. However, sometimes the situation is beyond your control. A data breach could expose your sensitive information, or your employer might fall for a W-2 scam, giving cybercriminals access to your name, address, Social Security number, and financial details.

What Are W-2 Scams?

W-2 scams target employers rather than individuals. Scammers attempt to trick someone with access to employees’ W-2s, often in the finance or human resources department, into sending them copies of every employee’s W-2. This type of phishing scam can provide cybercriminals with sensitive information, which they can use to file fraudulent tax returns or commit other types of identity fraud. They may also sell the W-2s or information on the dark web.

The attack usually begins with cybercriminals “spoofing” an email to make it appear as if it’s from a company executive. The email might request a list of employees and their W-2s, often with a sense of urgency. Employees, eager to comply with higher-ups, might quickly respond and send the requested W-2s.

Fraudulent W-2 Scams

In March 2023, the IRS warned of a new type of W-2 scam promoted on social media. People are encouraged to create fraudulent W-2 forms and use them to file false tax returns to receive large refunds. Filing a fraudulent tax return can result in severe penalties or criminal charges.

How to Avoid W-2 Scams

While you can’t always prevent someone from sharing your W-2 without your permission, you can take steps to protect yourself and your company from tax identity theft.

• Ask about anti-phishing training: If your employer doesn’t require cybersecurity training, suggest setting up training programs for everyone. Security awareness training can help employees detect and avoid phishing scams.
• Report suspicious emails: If you receive a suspicious email, don’t click on any links. Forward it to your IT department for guidance.
• Confirm requests: Call or message the sender to confirm requests for W-2s. Although it might be intimidating to ask a superior for confirmation, they will likely appreciate your efforts to protect the company.
• Share information: Share warnings and informational articles with colleagues to help them learn about scams.

If you’re concerned that your information may be compromised, file your tax return early. Additional attempts to file a return with your tax identification number will be rejected. You can also sign up for a free tax Identity Protection PIN, which you’ll need to include on your tax return for the IRS to accept it.

How to Report W-2 Scams

If you receive a W-2 scam email and don’t reply, forward the email to the IRS following their instructions. If you think you’ve fallen for a W-2 scam, report the issue to your company immediately. You may also need to report the loss to law enforcement, state agencies, and the IRS.

The IRS provides specific instructions for reporting W-2 scams. Acting quickly can help protect employees from identity theft. Email StateAlert@taxadmin.org for state-specific reporting information. Additionally, file a report with local law enforcement and a complaint with the FBI’s Internet Crime Complaint Center (IC3).

State and federal laws may dictate how you need to respond to a data breach involving personal information. Alert your company’s legal department to ensure all requirements are followed.

Monitor Your Credit and Identity

W-2 scams are not the only way for criminals to obtain your personal information. Data breaches are common, and your information might already be for sale online. Use a free dark web scan to see if your SSN, email, or phone number is exposed. Free credit monitoring can alert you to suspicious changes in your credit report, indicating someone may be applying for credit in your name. Subscription identity theft protection services like Experian IdentityWorks℠ offer additional monitoring and identity recovery services.

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