Tax Season Scams Are Starting Early
February marks the real start of tax season for most businesses. Payroll teams begin pulling records. Accountants request documentation. Leadership attention shifts to compliance, filings, and deadlines.
What rarely gets scheduled is the first security incident of the season.
For many small and mid-sized businesses, the earliest tax-related disruption is not a filing error or missing form. It is a targeted email scam that exploits routine payroll activity and internal trust. The W-2 scam consistently appears early in the year because it is simple, believable, and effective.
From an MSP perspective, it is also one of the most preventable tax-season threats we see.
The W-2 Scam Is a Form of Business Email Compromise
The W-2 scam is not generic phishing. It is a form of business email compromise (BEC), which the FBI has identified as one of the most financially damaging cybercrime categories affecting organizations worldwide (FBI IC3).
The attack relies on impersonation rather than malware.
An attacker researches your organization, identifies leadership names, and determines who handles payroll or HR. They then send a short, urgent email that appears to come from the CEO, owner, or another senior executive requesting copies of employee W-2s for tax preparation or review.
Because the request aligns with legitimate tax-season activity, it often bypasses suspicion.
What Data Is Exposed When W-2s Are Sent
When this scam succeeds, the exposure is immediate and severe.
A W-2 contains multiple elements of regulated personal information, including full legal name, Social Security number, home address, and wage data. From an identity-theft standpoint, this is a complete dataset.
The IRS has repeatedly warned that stolen W-2 information is commonly used to file fraudulent tax returns before legitimate employees submit their own (IRS).
Once fraudulent filings occur, employees face extended remediation processes involving the IRS, credit bureaus, and identity-theft recovery services.
How Businesses Typically Discover the Incident
Unlike ransomware or outages, W-2 scams rarely trigger immediate alerts.
In most cases, discovery happens weeks later when an employee files their tax return and receives a rejection notice stating that a return has already been filed using their Social Security number.
At that point, the incident escalates beyond cybersecurity. Employees deal with months of paperwork and monitoring. Employers face internal trust erosion, potential legal exposure, and reputational risk.
Operationally, this is one of the most disruptive email-based attacks because it directly impacts employees rather than systems.
Why This Scam Continues to Work
The W-2 scam does not succeed because it is technically advanced. It succeeds because it exploits predictable business behavior.
Tax season creates legitimate urgency.
Payroll document requests are expected.
Executives often request information quickly.
Employees are conditioned to respond promptly to leadership.
According to the Verizon Data Breach Investigations Report, social engineering and email-based impersonation remain among the most common initial attack vectors in breaches involving small and mid-sized organizations (Verizon DBIR).
When urgency overrides verification, impersonation thrives.
How MSPs See This Prevented in Practice
From a managed services and security operations standpoint, organizations that avoid W-2 incidents share consistent traits. Prevention relies more on policy discipline and verification culture than on complex tools.
The controls that work reliably include:
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A formal policy prohibiting W-2s or payroll data from being sent via email
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Mandatory second-channel verification for sensitive requests
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Multi-factor authentication on payroll and HR systems
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Regular employee education focused on seasonal threats
These practices are foundational elements of managed security services and reinforced through ongoing security awareness training rather than one-time instruction.
When verification is normalized, impersonation loses its leverage.
The Bigger Tax-Season Threat Pattern
The W-2 scam is rarely the only attack businesses see between February and April.
Tax season consistently coincides with spikes in IRS-themed phishing, spoofed accountant emails, fraudulent tax-payment demands, and invoice manipulation attempts. The FBI reports that BEC and impersonation fraud increase during peak tax months due to distraction and volume (FBI IC3).
Organizations that get through tax season cleanly are not lucky. They are prepared.
What Businesses Should Review Now
Preparation is most effective before the first suspicious email arrives.
Businesses that have not recently reviewed payroll access, verification rules, or employee awareness around tax-season scams face higher risk during February and March. A short review often uncovers simple gaps that can be corrected quickly.
This is where an IT strategy call or cybersecurity assessment helps identify exposure before it becomes an incident. Many organizations also use this time to confirm that email protections are actively detecting spoofed domains and impersonation attempts.
A Final Word for Leadership
The W-2 scam does not target infrastructure first. It targets people operating under pressure.
If your organization has clear rules, reinforced habits, and leadership support for verification, this threat is largely neutralized. If not, tax season is when the gap becomes visible.
If this feels relevant to your business, a brief IT strategy call can clarify whether your current controls align with real-world tax-season risk.
And if it doesn’t, there is a strong chance another business owner you know hasn’t addressed this yet.
Sharing this information early often prevents far more expensive conversations later.
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