It’s February, and tax season demands your accountant’s full attention. Your bookkeeper is busy gathering important documents as everyone’s focus shifts to handling W-2s, 1099s, and critical deadlines.
But there’s an often overlooked crisis lurking beneath the radar: the real challenge of tax season frequently arrives not as paperwork, but as a cunning scam.
One particularly deceptive fraud emerges early, well before April, targeting small businesses with ease and credibility. The IRS has issued repeated warnings about W-2 phishing scams, calling them one of the most dangerous tax season threats for employers. It might already be lurking in an employee’s inbox.
Understanding the W-2 Scam: The Mechanics
Here’s the typical scenario:
An employee—often from payroll or HR—receives an email that appears to come from the CEO, company owner, or a high-level executive.
The message is brief but urgent:
“Please send me copies of all employee W-2s for an upcoming accountant meeting. I’m swamped today and need this immediately.”
The tone feels authentic, the urgency is believable, and the request seems standard for tax season.
Trusting this, the employee forwards the W-2 forms.
But the email was never from the CEO. Instead, it came from a cybercriminal using a forged sender address or a deceptive domain.
Now, the scammer possesses sensitive information for every employee:
• Complete legal names
• Social Security numbers
• Home addresses
• Salary details
All the essential data needed to commit identity theft or submit fraudulent tax returns before your staff even do.
The Aftermath: Consequences for Your Employees
Victims commonly realize the breach when:
An employee files a tax return, only to have it rejected because “A return has already been submitted for this Social Security number.”
Someone else has already filed under their identity and received their refund.
Suddenly, the employee must navigate IRS inquiries, identity theft protection services, credit monitoring, and lengthy documentation—all stemming from a fraudulent email they never suspected.
Multiply this risk across your entire payroll, then imagine explaining to your team how their private information leaked due to a deceptive email scam.
This issue goes beyond security—it damages trust, strains HR resources, risks lawsuits, and tarnishes your company’s reputation.
Why the W-2 Scam Is So Effective
This scam isn’t the typical “Nigerian prince” email; it appears genuine upon first glance.
Its success lies in these factors:
The timing is perfect—requests for W-2s in February are expected, so no suspicion arises.
The request makes sense—it’s not asking for money or gift cards, but legitimate tax season documents.
The urgency feels natural—busy offices often see quick requests from executives.
The sender’s identity seems credible—scammers research company executives and accountants to mimic their communication.
Employees want to assist their leaders promptly; this eagerness often bypasses careful verification.
Steps to Shield Your Business Before the Scam Strikes
The encouraging news is that prevention is straightforward, relying more on policy and workplace culture than advanced technology.
Implement a strict “no W-2 documents sent via email” policy. No exceptions. Sensitive payroll files should never leave your premises as email attachments. Any such email request should be denied, even if it appears to come from the CEO.
Confirm sensitive requests through alternate communication channels—call, face-to-face, or chat—using contact information you already have, not numbers provided in emails. This simple 30-second step can prevent months of recovery work.
Conduct a brief, focused tax scam awareness meeting with payroll and HR teams immediately—don’t wait until tax season peaks. Educate them on scam signs and response protocols. Awareness costs little but offers huge protection.
Secure payroll and HR systems with multi-factor authentication (MFA) on all employee data access points. MFA acts as a final barrier if credentials are compromised.
Foster a culture where staff feel encouraged to verify suspicious requests without stigma. Praising cautious behavior eliminates scammers’ opportunities.
These five measures are easy to adopt quickly yet powerful enough to halt the initial waves of tax season scams.
Looking Beyond the W-2 Scam: The Broad Tax Season Threat
The W-2 scam is merely the beginning.
From now until April, expect a surge in tax-related cyber threats including:
• Fraudulent IRS notices demanding urgent payments
• Phishing emails disguised as software updates for tax tools
• Imitated communications from your accountant containing dangerous links
• Bogus invoices posing as legitimate tax expenses
Cybercriminals thrive during tax season when everyone is distracted and financial inquiries seem routine. The FBI IC3 Annual Report notes that phishing and business email compromise are among the costliest cybercrime categories, with losses accelerating during peak filing periods.
Successful businesses navigating tax season unscathed aren’t lucky—they are proactive.
They enforce policies, train their teams rigorously, and deploy systems designed to detect suspicious requests before damage occurs.
Is Your Business Prepared to Face Tax Season Threats?
If your business already enforces robust policies and your staff understands what to watch for, you’re ahead of many peers.
If not, now is the crucial moment to act—don’t wait for a scam to affect you.
Consider booking a 15-minute Tax Season Security Check today.
During this session, we will examine:
• Payroll and HR system access and multi-factor authentication
• Verification processes for W-2 requests
• Email security measures that detect spoofing
• A key policy revision many businesses overlook
If your business is already secure, that’s fantastic. If not, you likely know another business owner who could benefit from this knowledge—please share this article with them to help prevent costly damage.
Click here or give us a call at 408-335-0353 to schedule your free Discovery Call.
Because tax season is demanding enough without adding the stress of identity theft.
Frequently Asked Questions
What is a W-2 scam and how does it work?
A W-2 scam typically involves a cybercriminal impersonating a high-ranking company official, like a CEO, and requesting sensitive employee information, such as W-2 forms. The urgency and authenticity of the request can trick employees into sharing confidential data, which the scammer then uses for identity theft or fraud.
How can my business protect itself from tax season scams?
To safeguard against tax season scams, implement strict verification processes for sensitive information requests. Educate employees about recognizing suspicious emails, especially those that create a sense of urgency or appear to come from high-level executives. Regular training and clear communication channels can also help in mitigating risks.
What are the consequences of falling victim to a W-2 scam?
Falling victim to a W-2 scam can lead to significant consequences, including identity theft for employees and potential legal issues for the company. Victims may face difficulties filing their tax returns, as someone else may have already used their information fraudulently. This breach can also damage trust within the organization and strain HR resources.
How can One82 help businesses during tax season to avoid scams?
One82 specializes in managed IT and cybersecurity solutions that can help businesses safeguard sensitive information during tax season. By implementing robust security measures and employee training programs, One82 can aid in reducing the risk of falling victim to scams like the W-2 fraud.
