It is the time of year to be vigilant about W-2 scams. Many corporations fell victim to the W-2 phishing scam last tax season. Payroll or human resources department employees received an email, appearing to come from an executive, that requested a list of all employees and their W-2 forms. This year, the W-2 phishing attacks have evolved into “one of the most dangerous email phishing scams we’ve seen in long time,” says IRS Commissioner John Koskinen. The IRS has issued an urgent alert about the scam, which now targets school districts, tribal organizations, and nonprofits.
A new scam combines efforts to steal employees’ personally identifiable information with an older wire transfer scheme. An “executive” follows up the request for W-2 information with a request to have a wire transfer made to a specified account. According to the IRS, some companies have lost both personally identifiable information and thousands of dollars as a result of this scam.
Educating your employees about these phishing scams is the first line of defense. The IRS recommends that all payroll, finance, and human resources employees be made aware of these types of scams.
In the event your organization receives a W-2 scam email, the IRS asks that you forward the email to email@example.com and place “W-2 Phishing Scam” in the subject line. Additionally, the scam can be reported to the Internet Crime Complaint Center of the Federal Bureau of Investigation.
If your organization is a victim of this attack, it is important to follow the organization’s incident response plan and promptly consult with counsel about legal obligations, including data breach notification requirements.
For over ten years, Sara Hollan Chelette has represented a diverse range of businesses in corporate litigation. She has extensive experience in partnership and trust disputes as well as breach of contract matters. In addition to her commercial litigation work, she counsels clients on data privacy issues with particular emphasis on data breach notification requirements. Sara has been recognized on Thomson Reuters’ Rising Stars list each year since 2013. She earned her Bachelor of Science from Texas A&M University and her Juris Doctor from Baylor Law School.