IRS, Maryland Comptroller Warn Employers to Be Wary of W-2 Scams

ANNAPOLIS, Md. (January 18, 2018) - With the 2018 tax season starting January 29, the Internal Revenue Service, Maryland Comptroller Peter Franchot and tax industry leaders urge employers to educate their payroll staff about Form W-2 phishing scams. These schemes try to trick payroll personnel into disclosing sensitive information at small and large businesses, public schools and universities, hospitals, tribal governments and charities.

“These cybercriminals will try anything to access taxpayers’ personal and financial information,” said Comptroller Peter Franchot. “Bogus emails, fraudulent identities and persuasive claims are all in their bag of tricks. That’s why my team is laser-focused on stopping and holding accountable scammers who attempt to take advantage of law-abiding Maryland taxpayers.”

In 2017, the Maryland Comptroller’s office blocked suspicious tax returns from 95 tax preparation businesses at 113 locations throughout the state. Since taking office in 2007, Comptroller Franchot’s nationally renowned Questionable Returns Detection Team has identified and blocked more than 88,000 fraudulent returns and intercepted and denied $190.2 million worth of fraudulent refunds.

Last year, the IRS said reports to phishing@irs.gov from victims and non-victims about this scam jumped to approximately 900, compared to slightly more than 100 in 2016. More than 200 employers were victimized in 2017, which translated into hundreds of thousands of employees who had their identities compromised.

By alerting employers now, the IRS and its partners in the Security Summit effort hope to reduce the number of victims this year. Last year, the IRS also created a new process to report these scams.

Here’s how the scams work: Cybercriminals identify chief operating officers, school executives or others in authority. Using a technique known as business email compromise or business email spoofing, fraudsters posing as executives send emails to payroll personnel requesting copies of Forms W-2 for all employees. The Form W-2 contains the employee’s name, address, Social Security number, income and withholdings. Criminals use that information to file fraudulent tax returns, or they post it for sale on the Dark Net.

The IRS has established a special email notification address specifically for employers to report Form W-2 data thefts. Email dataloss@irs.gov to notify the IRS of a Form W-2 data loss and use the subject line “W2 Data Loss” so that the email can be routed properly. Do not attach any employee personally identifiable information data. Include your business name, business employer identification number (EIN) associated with the data loss, name, phone number, summary of how the data loss occurred and volume of employees impacted.

Employers can learn more at Form W-2/SSN Data Theft: Information for Businesses and Payroll Service Providers. Employers also should be aware that cybercriminals’ scams constantly evolve. Finance and payroll personnel should be alert to any unusual requests for employee data.

Comptroller Franchot to Help Raise Awareness of Elder Financial Abuse

ANNAPOLIS, Md. (January 5, 2018) – Comptroller Peter Franchot and Attorney General Brian Frosh will kick off PROTECT Week on Monday, January 8 at Charlestown Retirement Community in Catonsville at an event to raise awareness about elder financial abuse and tax fraud prevention. The Comptroller will participate in the week-long campaign, which will hold several events focused on how Marylanders can avoid becoming a victim of these crimes (see schedule below).
Guidewell Financial Solutions, a Maryland nonprofit credit counseling agency, is leading the statewide campaign sponsored by Wells Fargo in partnership with the Offices of the Comptroller and Maryland Attorney General and several other agencies.
“Over the last 10 years, my office has detected and blocked more than 80,000 fraudulent tax returns worth over $185 million,” said Comptroller Franchot. “Victims of tax fraud – many of whom are vulnerable, older Marylanders – sometimes deal with the impact of this abuse for years in silence. That’s why education and awareness are key to keeping seniors safe.”
“There are huge risks that older victims of financial exploitation can face in terms of their personal financial health and overall economic well-being,” said President and CEO of Guidewell Financial Solutions Helene Raynaud. “We’re legally obligated to report suspected financial exploitation of older Marylanders. Raising awareness about the prevalence of this issue is imperative to prevention.”
Financial elder abuse is when someone uses an older adult’s property or money improperly or illegally. PROTECT Week is to raise awareness, to help Marylanders recognize the warning signs and to provide tools to intervene early when an older adult is in danger.
The schedule of events is as follows:
• Monday, January 8, 10:30 a.m. to Noon
Kickoff news conference at Charlestown Retirement Community Main Auditorium: 215 Maiden Choice Lane, Catonsville, MD 21228
Comptroller Franchot and Attorney General Frosh will kick off a presentation to safeguard financial well-being and to prevent financial harm and elder financial abuse. Also taking part are Wells Fargo, Maryland Volunteer Lawyers and Robert E. Frey of the Attorney General’s Consumer Protection Division.
• Tuesday, January 9, 10:30 a.m.
Tele-Town Hall with AARP. To participate, register here.
Comptroller Franchot along with AARP Maryland and the AARP Fraud Watch network will take part in a telephone town hall with Guidewell Financial Solutions and Robert E. Frey from the Attorney General’s Consumer Protection Division to help Marylanders learn how to spot and avoid scams.
• Wednesday, January 10, 1 to 2:30 p.m.
Holiday Park Senior Center, Multi-Purpose Room: 3950 Ferrara Drive, Silver Spring, MD 20906
The Comptroller’s Office will be part of a presentation on elder financial abuse fraud featuring EverSafe, the Maryland Consumer Rights Coalition and the Montgomery County Office of Consumer Protection. Speakers also will address policy issues for the first day of the 2018 Maryland Legislative Session.
• Thursday, January 11, 10:30 to 11:30 a.m.
Riderwood, Montgomery Station Maryland Room: 3120 Gracefield Road, Silver Spring, MD 20904
Comptroller Franchot will join representatives from the Montgomery County Office of Consumer Protection, the Montgomery County State’s Attorney’s Crimes Against Seniors Division and the Maryland CASH Campaign to provide tips and highlight resources available to seniors to help protect their identities and prevent financial abuse and loss.
• Friday, January 12, 9:30 to 11 a.m.
Charlotte Hall Veterans Home: 29449 Charlotte Hall Road, Charlotte Hall, MD 20622
Deputy Comptroller Sharonne Bonardi will take part in a presentation for Maryland’s veteran community on tax assistance and resources to help safeguard financial well being. Also participating are AARP, the Maryland CASH Campaign and Robert E. Frey from the Attorney General’s Consumer Protection Division.
Anyone who suspects that an older adult is being mistreated or is the victim of financial exploitation or fraud is urged to call the Maryland Department of Aging at 1-800-332-6347 or the police.
MEDIA CONTACTS: Joe Shapiro: jshapiro@comp.state.md.us
410-260-7305 (office); 443-871-2244 (mobile)
Alan Brody: abrody@comp.state.md.us
410-260-6346 (office); 443-924-1473 (mobile)

Comptroller Franchot Announces Opening of Tax Season January 29

ANNAPOLIS, Md. (January 5, 2018) – Comptroller Peter Franchot announced today that Maryland will begin processing personal income tax returns for Tax Year 2017 on January 29 – the same day the Internal Revenue Service begins accepting returns. The Comptroller’s Office will not immediately process a state tax return if W-2 information is not on file. Employers are required to report wage information to the Comptroller on or before Jan. 31.

Processing of business tax returns begins Monday, January 8.
This year, the filing deadline for 2017 tax returns is Tuesday, April 17 rather than the traditional April 15. In 2018, April 15 falls on a Sunday and Emancipation Day – a legal holiday in the District of Columbia – falls on April 16, which pushes the filing deadline to the following day.

Last year, the Comptroller’s Office stopped accepting income tax returns from 95 companies doing business in 113 locations for submitting numerous highly suspicious returns. Collectively, they filed thousands of state returns that the agency believed were fraudulent.

“In 2017, my office blocked more than 10,000 fraudulent returns worth more than $16 million,” said Comptroller Franchot. “I urge Marylanders to be on the lookout for those who want to steal taxpayers’ identities and personal financial information. Any taxpayer with concerns about a tax preparation business should call my office. We remain vigilant in our efforts to thwart these unscrupulous practices.”

Taxpayers are encouraged to file their returns electronically for the fastest possible processing and to ensure they receive all possible refunds. A list of approved vendors for use in filing your electronic return can be found at www.marylandtaxes.gov.

Free state tax assistance is available at all of the agency’s 12 taxpayer service offices Monday through Friday from 8:30 a.m. to 4:30 p.m. A list of office locations can be found at www.marylandtaxes.com.

For more information on any tax-related matter, please visit Comptroller’s website at www.marylandtaxes.com or call 1-800-MD-TAXES (1-800-638-2937) or 410-260-7980 in Central Maryland.

MEDIA CONTACTS: Joe Shapiro: jshapiro@comp.state.md.us
410-260-7305 (office); 443-871-2244 (mobile)
Alan Brody: abrody@comp.state.md.us
410-260-6346 (office); 443-924-1473 (mobile)