W2 phishing scams have been on the steady increase especially during the tax season, when employees are aghast to find that their tax returns have already been filed by scammers or their tax refunds have been misdirected. The Form W 2 is required to be issued by every employer to his employee, stating the amount withheld from their annual wage payouts for tax purposes. The W-2 phishing scam is like any other phishing scam, but here, the information targeted is the tax-related information of employees from the HR of the organization. Many employees do not report phishing scams of this type due to ignorance of the implications of a compromise in their tax information confidentiality. Here are reasons as to why they must not hesitate to report the scam:
#1 Report phishing scams to protect further identity fraud
For employee, the Form W2 is a storehouse of important information such as:
- Details of identity such as name and date of birth
- Details of profession like name of organization, designation and email id
- Tax related information like annualized earnings, social security number and amount of tax withheld
Failure to report phishing scams will lead to increased chances of identity fraud like manipulation of bank accounts and online payment frauds.
#2 Report phishing scams to prevent fraudulent filing of returns
The IRS has been witnessing an increasing trend in the number of online tax fraud. Scammers, who can access the W2 forms, will very well proceed to file tax returns using the stolen identity of the victim. They can claim refunds even before the tax payer comes to know of the fraud. People can be subjected to further damages by manipulating filed copies of the fake tax returns. Failure to report the scam will give ample space for scammers to even get mortgaged and raise funds on behalf of the business.
#3 Report phishing scams to protect your credit ratings
W2 phishing scams aim at organizations with huge employee count such as hospitals, schools and the public utility services. This is because they can easily get access to personally identifiable information (PII) of thousands of employees. It is essential to report phishing scams because:
- Any mess-up with the social security number will reject genuine tax returns and make the victim as a defaulter of tax
- Finances raised without knowledge of the victim and subsequent failure to repay debts will lead to a crash in credit ratings. It is better not to yield to phishing mails asking for a copy of W2, even if it originates from an email id of the HR or the IRS.
- Opening of multiple accounts with different banks, using them for money muling or money laundering purposes will also result in negative credit rating. Failure to report phishing scams on time will cause serious financial damages.
Corporates must train their HR personnel on the need to protect the access of Form W 2 and in identifying as well as reporting of W 2 phishing scams, which will go a long way into protecting confidential tax information of its employees.
