Insights: Article

Dangerous W-2 Phishing Scam Evolving: Targets Include Government Entities

By   Anders Erickson

March 14, 2017

A dangerous email phishing scam could affect your hospital.

Cyber criminals are using spoofing techniques to disguise an email, making it appear like it's coming from an executive within the organization so that the recipient (usually in the payroll or HR department) feels compelled to respond. The cyber criminal asks for a list of employees and their W-2s. They intend to use this information to fake a tax return and fraudulently collect an employee's refund before the employee files themselves. Cyber criminals may also be asking to wire money, and continue to evolve their scams.

The IRS issued an alert in February to all employers to beware of the emerging phishing email scheme. It's spreading to many industries, including health care, school districts, tribal casinos, chain restaurants, temporary staffing agencies, and shipping and freight.

If you believe that your organization has been a victim of these types of scams, you can:

  • Report the W-2 thefts to the IRS immediately so that they can begin to help protect the employees from tax-related identity theft. Forward to phishing@irs.gov and place "W2 Scam" in the subject line.
  • File a complaint with the Internet Crime Complaint Center (IC3,) operated by the Federal Bureau of Investigation.


If you are an employee whose W-2 has been stolen:

  • You should review the recommended actions by the Federal Trade Commission atwww.identitytheft.gov or the IRS at www.irs.gov/identitytheft.
  • File a Form 14039, Identity Theft Affidavit, if your tax return gets rejected because of a duplicate Social Security number and/or if instructed to do so by the IRS.


If your organization has avoided scams so far, there are measures to take to prevent future attacks. You can:

  • Consult cyber security experts about how to establish a culture of security at your organization.
  • Enact policies and procedures safeguarding the handling of W-2s during tax season.
  • Encourage your employees to be safe online and avoid scam sites fronting as tax return eService sites.


Questions?
For more information about cyber security, please contact your Eide Bailly representative or Eide Bailly's Cyber Security Leader Anders Erickson at 208.383.4731 or aerickson@eidebailly.com.

Latest Insights

June 15, 2018
Recorded Webinar
Congress has passed the largest and most comprehensive tax reform legislation in the past 30 years and businesses and dealerships are trying to figure out the tax implications and what this means for them in their current situation and moving forward.
June 15, 2018
Video
Learn more about the basics of cost segregation and whether your recent building purchase, renovation or new construction could reduce your taxes and increase cash flow.
June 14, 2018
Article
It is not to say that well run companies do not get breached, but all indicators lead to the conclusion that if certain things are done from the top down, the effects and cost of defending your company against data breaches, and recovering from a breach…
June 14, 2018
Article
All deals are unique in the world of transactions but unique does not have to equate to surprises on either side.
June 12, 2018
Article
As taxpayers work closely with their tax advisers to develop tax projections and planning strategies, state income taxes take on greater importance than in the past - in addition, some states’ legislatures will not be taking up the issue of federal…
June 8, 2018
Article
In May, investors were left to interpret mixed geopolitical and financial signals: The historic US-North Korea summit was on, then off, then possibly on again; An apparent truce emerged in the US-China tariffs battle, but it did not last; Oil rallied, but…