It's getting harder for scammers to commit tax refund fraud as people, and the government get more sophisticated. Last year it was down 72% from what it was in 2015. This is massive, considering tax fraud in 2015 was about $21 billion. 

By keeping an eye out, you can protect yourself and others from having their identity and tax refund stolen. Keep reading to have phishing with a W-2 explained.

How Do W2 Scams Happen?

A W-2 phishing scam happens when the scammer impersonates someone that would ask for W2 information. A common one is to pretend to be the CEO or CFO of a company. They mark the email as urgent and request the W2 information for all of the employees working for the company. 
Eager to please, an employee sends off the information. Now the scammer can steal the identity of everyone at the company. They file false tax returns and collect the refunds before disappearing into the night. 

Protecting Yourself from Phishing with a W-2 Explained

There are four easy things you can do to protect yourself from these phishing scams. The most significant factor is putting company policies in place to prevent an accidental sharing of sensitive information.
Raise Awareness 
The first step is to make all of your employees aware of potential scammers. Remind them during tax season when scammers are at their most active. This especially goes for your financial department, since they are a bigger target. 

Enforce Company Policy 

Create company policies about how sensitive information is handled. This could be a rule that no employee personal information gets sent by email. Or that people aren't allowed to ask for this information by email. 

Stay Vigilant 

Create a standard where, if sensitive information is asked for, it isn't automatically complied with. Instead, the sender should be verified. This small step will catch potential scammers. 

Flag Scam Emails 

If you or any of your employees receive a scam email, they should flag it immediately. Let the entire company know that one was sent, and others might also receive them. 
You should also forward the email to phishing@irs.gov and put "W2 Scam in the subject line. This will help the IRS track down potential scammers to prevent them from succeeding with other people. 

Protect Yourself and Your Company 

Now that you've had phishing with a W-2 explained, you're ready to protect you, your company, and your employees. The first step is making them aware and educating them on what to look for. Then you'll want to enforce company policies that will continue everyone's vigilance. 
If all of this sounds like a lot of work, you can outsource your payroll needs. By working with a professional payroll company, you can have confidence that your employee's personal information is safe from scammers. 

Check out the cybersecurity section of our blog for more ways to stay safe from online scams.