On March 1, 2016 the Internal Revenue Service (IRS) issued an alert for all payroll and HR professionals advising of an emerging "phishing email" scheme that uses emails which appear to be from their own company executives requesting personal information on employees.

HR Best Practices and Payroll Compliance Require Due Diligence Against Scammers

According to the IRS the scheme has already claimed a number victims. Payroll and human resources personnel are decieved into emailing payroll data such as Forms W-2 that contain Social Security numbers and other personally identifiable information to scammers posing as company executives.

IRS Commissioner John Koskinen noted,

“This is a new twist on an old scheme using the cover of the tax season and W-2 filings to try tricking people into sharing personal data. Now the criminals are focusing their schemes on company payroll departments. If your CEO appears to be emailing you for a list of company employees, check it out before you respond. Everyone has a responsibility to remain diligent about confirming the identity of people requesting personal information about employees.”

Phishing Email and Payroll Management

The website www.webopedia.com defines "phishing attacks" as deceptive emails:

Phishing email will typically direct the user to visit a website where they are asked to update personal information, such as a password, credit card, social security, or bank account numbers, that the legitimate organization already has.

This particular variation of phishing is known as a “spoofing” email. It may contain, among other things, the actual name of the company's CEO. In this phishing attempt, the “CEO” sends an email to a company payroll office employee and requests a list of employees and information including SSNs.

These are some of the details usually contained in the scam e-mails:

• Kindly send me the individual 2015 W-2 (PDF) and earnings summary of all W-2 of our company staff for a quick review.
• Can you send me the updated list of employees with full details (Name, Social Security Number, Date of Birth, Home Address, Salary).
• I want you to send me the list of W-2 copy of employees wage and tax statement for 2015, I need them in PDF file type, you can send it as an attachment. Kindly prepare the lists and email them to me asap.

What HR and Payroll Personnel Should Watch For

The IRS recently renewed a wider consumer alert for e-mail schemes as a result of an almost 400 percent increase in phishing and malware incidents so far this tax season, as well as other reports of scams targeting the wider tax community.

Those emails are designed to trick taxpayers into thinking these are official communications from the IRS or others in the tax industry, including tax software companies. The phishing schemes can ask taxpayers about a wide range of topics includinf information about refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information.

IRS Criminal Investigation already is reviewing several cases in which people have been tricked into sharing SSNs with cybercriminals. Criminals use this with personal information stolen elsewhere in order to monetize the data by filing fraudulent tax returns for refunds.

The IRS, state tax agencies and tax industry are engaged in a public awareness campaign — Taxes. Security. Together. — to encourage everyone to do more to protect personal, financial and tax data. See IRS.gov/taxessecuritytogether or Publication 4524 for additional steps you can take to protect yourself. 

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