Tax Season Scams Are Starting Early. Here's the One That Hits Small Businesses First.

February marks the peak of tax season. Accountants are swamped, bookkeepers are busy gathering paperwork, and everyone is focused on W-2s, 1099s, and looming deadlines.

But there's a hidden danger that often catches businesses off guard: tax season scams.

One particularly deceptive scam strikes early—well before April—and targets small businesses with tactics that seem perfectly legitimate. It may already be lurking in someone's inbox at your company.

Understanding the W-2 Scam and How It Operates

Here's the scenario:

An employee responsible for payroll or HR receives an email that appears to come from the CEO, owner, or a high-level executive.

The email is brief and urgent:

"Please send over copies of all employee W-2s for a meeting with the accountant. I'm overwhelmed today and need them ASAP."

The request seems natural and timely. Tax season is hectic, making urgency believable. So, the employee complies and sends the W-2s.

But the catch? The email isn't really from the CEO. It's from a cybercriminal using a spoofed email address or a nearly identical domain name.

That scammer now has access to every employee's:
• Full legal name
• Social Security number
• Home address
• Salary details

All the info needed to commit identity theft or file fraudulent tax returns before your employees can.

What Happens After the Scam Occurs?

Typically, victims discover the fraud when:

An employee tries to file their tax return but receives a rejection notice stating, "Return already filed for this Social Security number."

This means someone else already filed on their behalf and likely collected their refund.

Your employee then faces a long, stressful process dealing with the IRS, monitoring their credit, and managing identity theft protection for months—all because of an email they never should have trusted.

Imagine that multiplied across your whole payroll. Explaining this breach to your team is more than a security headache—it's a crisis of trust, an HR challenge, a legal risk, and a blow to your reputation.

Why Is This Scam So Effective?

Unlike obvious phishing attempts, this scheme is sophisticated:

• The timing feels right: asking for W-2 information in February is expected.
• The request seems reasonable, not a wild financial demand.
• The urgency fits the busy atmosphere of tax season.
• The sender's identity appears genuine because scammers research their targets carefully.
• Employees are eager to assist leadership, making them less likely to question requests.

How to Shield Your Business from This Threat

The good news? You can stop this scam before it starts through clear policies and workplace culture—not just technology.

• Implement a strict policy: never send W-2s or sensitive payroll documents via email under any circumstances, even if the request seems to come from the CEO.
• Verify sensitive requests through a secondary channel: call, meet in person, or use existing contact methods—not a reply to the email itself.
• Host a quick 10-minute briefing now to prepare payroll and HR teams for the surge in scams, so they recognize them early.
• Secure all payroll and HR systems with multi-factor authentication (MFA) to add layers of protection.
• Encourage a culture that rewards employees for double-checking requests; verification should never be seen as paranoia.

These five simple, powerful steps can stop the first wave of attacks and protect your company.

The Larger Tax Season Threat Landscape

The W-2 scam is just one example. From now until April, expect an increase in:

• Fake IRS notices demanding urgent payment
• Phishing emails disguised as tax software updates
• Spoofed messages appearing to come from your accountant with malicious attachments
• Fraudulent invoices disguised as legitimate tax expenses

Attackers exploit how distracted and hurried businesses are during tax season. The companies that come through unscathed are the ones who anticipated these risks and took proactive steps.

Is Your Business Prepared?

If you have strong policies and your team knows the signs, you are ahead of the majority of small businesses.

If not, there's no better moment than now to act—before you face the first costly attack.

Consider scheduling a 15-minute Tax Season Security Check with us.

During this review, we'll assess:
• Payroll/HR access controls and MFA implementation
• Verification procedures for W-2 requests
• Email security measures to detect spoofed messages
• The essential policy adjustments many businesses overlook

If your business already has solid protections, fantastic. But you might also know someone less prepared. Share this article to help protect others from expensive setbacks.

Click here or give us a call at (949) 396-1100 to schedule your free 15-Minute Discovery Call.

Because tax season is challenging enough without the added risk of identity theft.