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How to avoid payroll scams this tax season

For many businesses, January is the start of a new fiscal year. It definitely begins with promise and optimism especially if the previous year ended strong. But there are also substantial responsibilities when it comes to preparing a federal income tax return. Indeed, there is a duty to ensure that you provide accurate information to the federal government, but as more electronic information is passed between businesses, it is increasingly important to guard against scams.

In fact, the Internal Revenue Service (IRS) has warned of a new scam involving false requests for w-2 information. Essentially, the scam begins with a falsified request from a purported high level employee requesting information about employee w-2 forms from the company’s human resources department. The email will ask for an earnings summary for “a quick review” or to “double check information.”

The request will not state a specific reason why the information is needed, but the request will explain in so many words the urgency of the request. Unfortunately, once the HR department or payroll services center has acquiesced and sent the information, the scammers are free to use the information as they please. This usually means that fraudulent tax returns may be filed in their (the employees) names.

Because of this, it is critical to take reasonable steps to protect sensitive information. If someone who is not a custodian of such information emails or calls to review it (instead of stopping by personally) chances are that it is an attempt to perpetuate a scam.

The preceding is not legal advice. 

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