Tax Scam Season is Back

Tax and Financial News for May 2016

Tax Scam Season is Back

Cybercriminals are on the prowl, and phishing schemes are surging this year. Stolen information is increasingly being used to file fake tax returns.

IRS experts expect an increase in tax fraud this year. While the agency often is able to identify and catch fraudulent filings, some fake returns do get through. In 2013, for example, the Government Accountability Office found that the IRS stopped $24.2 billion in fake tax return refunds, but still paid out $5.8 billion. Below are a few current schemes to be aware of and some ways you can protect yourself.

Medical Records

It is usually not the same cybercriminals who steal the information and then file the fake tax returns. One set will steal the underlying records or information and then sell it to others, who then file fake tax returns. Given the lucrative nature of phony tax return filing, it creates a large demand for criminals who specialize in stealing the information as medical records are worth more than most sources. Stolen health care records often contain everything an identity thief needs, including Social Security numbers, and as a result can sell for multiples of what credit card records price at on the black market.

Beware the Boss

Another resurgent scam comes in the form of identity thieves sending out phony emails pretending to be a top level executive at an employee’s company, often the president or CEO. In these emails, the writer demands W-2 files in electronic format, usually with a sense of extreme urgency.

Unlike other “boss request” scams, this set is not targeting individual employees and instead targets human resources and payroll professionals. Phishing for W-2s isn’t a new trick, but it can catch people off guard who have never run into it before. Obtaining a W-2 makes it extremely easy to create a fake tax return and make up huge false refund requests – hence the rise of this scam.

The current crop of these emails is more sophisticated than similar scams in the past. They create more plausibility by only targeting human resources and payroll employees and come from authentic looking email addresses. According to the IRS, some examples of the text in these emails include:

  • “Kindly send me the individual 2015 W-2 (PDF) and earnings summary of all W-2s of our company staff for a quick review.”
  • “I want you to send me the list of W-2 copy of employees’ wage and tax statements for 2015. I need them in PDF file type, and you can send it as an attachment. Kindly prepare the lists and email them to me ASAP.”

Some of the key tip-offs that these emails are phony are the use of the words “kindly”, “PDF” and anything that implies extreme urgency in response time.

Protect Yourself

There are numerous actions you can take to protect yourself.

  • Avoid giving out your Social Security number whenever possible – even to your doctor. While it might be standard procedure, in most cases health care providers do not need your Social Security number.
  • File your tax returns as soon as you can each year. The earlier you file, the less time criminals have to file a fake tax return.
  • Do not click on any links in emails or call back any numbers left for you in a voicemail as they can compromise your computer and may increase phone calls from scammers.
  • If your accountant offers a secure file service to transmit documents electronically, make sure you use it.

If you have been a victim of identity theft, you should monitor your brokerage, bank and credit card accounts for any unusual activity. Finally, always remember that the IRS does not initiate contact with taxpayers by e-mail or phone – only by mail.



General Business News for May 2016
How to Reduce the Need for Exit Interviews

Employees who quit are a fact of life for business owners and their managers. For the owners and managers of some businesses, exit interviews can provide insight into why employees leave for another organization. While not every employee who quits can be persuaded to stay in their position, businesses can learn how to help reduce the number of employees who leave in the future through exit interviews.

Exit Interview Concerns

One concern about an exit interview is that employees might not always be honest as to why they’re leaving. While an employee may say they are leaving for a position that is located closer to home or provides work flexibility with more remote time, for example, the real reason might be an abrasive manager or a recruiter who approached them through an agency.  

Common Reasons Employees Leave

While some employees leave organizations due to a lack of advancement or dissatisfaction with their pay, one of the main reasons people leave is their manager’s workstyle – or lack thereof. Other reasons might include changing the employee’s responsibilities from the job description; requiring excessive overtime; or situations where an employee is not allowed to explore his or her creativity on work-related projects. Another cause for employees to leave their job centers on concerns about performance and professional development that get ignored by managers. If managers fail to pay attention, workers might become disengaged because of their inability to expand their skill set. Don’t be discouraged, though. There are some strategies employers can use to better communicate with new employees – and keep them around for a longer term.

Use an Employee Entrance Questionnaire

Using an employee entrance questionnaire helps organizations determine how well they’ve met promises they made to new employees by measuring the new employee’s perception of their role. Along with measuring how well an employee is in tune with a company’s mission and culture, it can determine if the role’s goals are articulated well, and if the level of training is in-line with the required responsibilities. Another benefit of giving this survey during the on-boarding process is it offers a higher chance of more truthful feedback. It also provides an opportunity to work with employees – individually and in groups – if the same compliant is reported by multiple people.

How to Improve the Workplace for Retention

While every workplace is different, there are some things most workplaces can implement to help retain talent. If the budget isn’t there for all managers, prioritize training for front-line managers and supervisors who can work with entry-level employees that are most likely to leave. Other ideas include mentoring workers to evaluate their performance, along with giving employees a chance to provide an honest assessment of their job satisfaction, especially in the first 90 days.

Considerations When Conducting Exit Interviews

One consideration to reduce the potential for emotional employees is to schedule the interview as soon as they give notice, instead of letting the employee stew over the reasons they want to leave. Another consideration when conducting exit interviews is to make sure a neutral third-party, such as an HR employee or manager from a different department, conducts the exit interview. If the employee’s direct supervisor/manager conducts it, an employee’s honesty will almost certainly be suppressed.

While there’s no magic bullet to retaining staff, using exit interviews and implementing that feedback with new candidates gives you the opportunity to reduce ongoing turnover.



Tip of the Month for May 2016

Tip: Warning Signs of Identity Theft and What To Do

Identity theft remains one of the most pervasive crimes in the United States. As technology gets smarter, so do the scammers. Here are the most common warning signs that your personal/confidential information may have been stolen.

  • You see charges you don’t recognize (or companies you don’t know) on your credit card bill
  • Withdrawals you haven’t authorized are on your bank statements
  • The Internal Revenue Service advises you that more than one tax return was filed in your name. (Note:  The IRS never makes phone calls requesting information —but scammers do. Don’t give personal information to anyone you don’t know over the phone.)
  • You receive bills from doctors or hospitals for services you didn’t receive
  • Your health insurance denies you coverage based on records that don’t reflect your health issues
  • Your IP address is hijacked by online crooks for criminal activities

You might get notifications from companies warning that their systems (and hence your data) have been comprised by cyber crooks. This is not a clear-cut sign that your data has been stolen, but it should encourage you to check your bank accounts and credit reports immediately.

Immediate Action

If you believe you are a victim of identity theft, here’s what to do:

  1. Contact any one of the three credit reporting agencies Experian (, Equifax (, or TransUnion ( Ask the agency to put out a 90-day fraud alert to notify lenders and creditors to take extra steps to confirm your identity before entering into any business transaction. It doesn’t matter which agency you contact – it will automatically contact the other two on your behalf. Alternatively, you may choose to contact and request that each agency (you will have to contact each of the three agencies) put a security freeze on your credit reports. This means that no new creditors may access your credit reports and that applications will be denied even if the thief has your Social Security number. In the future, you will have to contact each credit reporting agency and go through their specific procedures to “unfreeze” your credit report.
  2. Obtain credit reports from all the above mentioned agencies. You are entitled to a free copy from each. Review the reports promptly, flag any fraudulent items and begin the dispute process.
  3. Contact every organization that you believe may be affected. That means credit card companies, banks, healthcare insurance providers, Social Security Administration, etc.
  4. Make a report to the authorities. This requires two steps – first, contact your local law enforcement office to report the crime, and then contact the Federal Trade Commission (FTC) to create an identity theft report. You can reach the FTC online at: or by phone at: 877-ID THEFT.
  5. Protect your Social Security number. If there is any chance it is in the wrong hands, contact the Social Security Administration and the IRS. A thief might try to steal your tax refund or seek benefits using your name.

Be proactive and don’t wait for trouble. Request the credit report you can obtain for free annually from each of the reporting agencies. Try staggering your requests so that you can review a report every fourth month.