Preventing Your Business from Falling Prey to Tax Fraud
September 30, 2016
The dangers of tax filing fraud to businesses
Tax filing fraud (or tax-related identity theft) occurs when someone uses your Employer Identification Number (EIN) to fraudulently declare earnings and withhold taxes on a counterfeit W2 form in order to file a tax return that claims a refund. Businesses are often unaware that this has happened to them until the IRS discovers a discrepancy between the total the business paid in payroll taxes and what has been claimed by the fraudsters. As a result, the IRS may send a letter to the business saying they owe withholding taxes.
Your business can be a victim of tax filing fraud if someone uses your EIN to file a tax refund claim.
Report any suspicious tax-related emails to the IRS.
Know the warning signs of tax fraud
Unfortunately, it’s easy for criminals to obtain a business’s EIN. So you may not become aware that you’re a victim of tax fraud until you are contacted by the IRS or state agency about any of the following:
- More tax returns were filed using your EIN than the number of your employees
- IRS records a deficiency in the withholding amount and/or employment taxes your business has paid, and demands immediate payment
- The IRS tax examiners call to verify suspicious claims or W2 forms
What to do if you become a victim of tax fraud
- Respond immediately to any IRS notice
- If you previously contacted the IRS and did not have a resolution, contact them for specialized assistance at 1-800-908-4490
To report possible tax fraud
Report suspicious online or emailed phishing scams to firstname.lastname@example.org or by phone at 1-800-366-4484.