Scams to Avoid During Tax Season

Tax season is a busy and stressful time for employers and employees alike. Unfortunately, it’s also prime time for scammers. Each year, fraudsters become more sophisticated, targeting businesses, payroll departments, and individual employees with schemes designed to steal sensitive information and money.

Understanding the most common tax-related scams can help protect your organization, your employees, and your payroll processes.

Payroll and HR Phishing Emails

One of the most common scams during tax season involves phishing emails that appear to come from the IRS, a payroll provider, or company leadership. These messages often request employee W-2 information, direct deposit changes, or immediate payment for “Outstanding tax issues.”

Red flags include:

• Urgent or threatening language.
• Requests for sensitive information via email or text.
• Sender addresses that closely resemble legitimate domains.

The IRS will never request sensitive data or payments via email, text, or social media. Payroll and HR teams should always verify requests through trusted internal channels before responding.

W-2 and Employee Data Scams

Scammers frequently target employers to obtain W-2 forms containing Social Security numbers and wage information. These scams often impersonate executives or managers, requesting employee tax documents “As soon as possible.”

To prevent this:

• Limit access to employee tax data.
• Require internal verification for data requests.
• Train staff to recognize impersonation attempts.

Strong internal controls are essential to protecting confidential employee information.

Fake Tax Preparers and Filing Services

Another common scheme involves fraudulent tax preparers who promise unusually large refunds or fast processing for a fee. These scammers may file incorrect returns, steal personal information, or disappear after receiving payment.

Employees should be encouraged to:

• Use reputable, credentialed tax professionals.
• Avoid preparers who base fees on refund amounts.
• Never sign a blank or incomplete tax return.

Employers can help by providing educational resources and reminders during tax season.

IRS Impersonation Phone Calls and Texts

Scammers often pose as IRS agents, calling or texting individuals and threatening penalties, arrest, or wage garnishment if immediate payment isn’t made. These messages are designed to create fear and urgency.

Key reminders:

• The IRS does not initiate contact by phone, text, or email.
• Payments are never requested via gift cards, wire transfers, or cryptocurrency.
• Legitimate IRS notices are sent by mail.

Encouraging employees to pause and verify can prevent costly mistakes.

Unemployment and Payroll Tax Fraud

Businesses may also face unemployment insurance fraud or payroll tax scams, where criminals file false claims or send fake notices demanding payment. Responding without verification can lead to financial loss or compliance issues.

Employers should:

• Review all government notices carefully.
• Verify correspondence directly through official agency websites.
• Partner with Payentry as a trusted payroll provider to manage filings and notices.

How Employers Can Reduce Risk

Proactive prevention is the best defense against tax-related scams. Employers can reduce risk by:

• Educating employees and managers on common scams.
• Implementing multi-factor authentication and access controls.
• Establishing clear payroll and HR request procedures.
• Work with our secure, compliant payroll and HR systems.

Protecting Your Business Starts with Awareness

Tax season doesn’t have to mean increased risk. By staying informed, reinforcing internal controls, and leveraging secure payroll and HR technology, organizations can protect sensitive data and avoid costly scams.

At the end of the day, awareness and preparation are key to keeping your business and your employees safe during tax season.

Contact us for a complimentary consultation to explore practical, compliant solutions tailored to your organization and workforce.

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*MPAY LLC dba Payentry (Company), is not a law firm. This article is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other Company materials does not create an attorney-client relationship. The Company is not responsible for any inadvertent errors that may occur in the publishing process.