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Businesses need to be on guard against identity thieves who target company and employee records so they can file fraudulent tax returns or apply for credit.

Experts are warning employers to carefully guard EINs - Employer Identification Numbers - and employee W-2 information.

Sophisticated criminals are using email to pass themselves off as company executives and are requesting employee W-2’s, which are then used to file bogus tax returns or are sold on the dark web. They also are using business EINs to file business returns or to seek new credit.

The crooks file tax returns early in order to get refunds, which then cause massive headaches when workers or businesses file their own returns and get rejected.

Here are some things you can do to help protect your business and employees:

  • Educate payroll or finance personnel to be cautious of W-2 requests via email. Businesses are encouraged to limit access to this information and to require additional verification, such as a phone call or a face-to-face request.
  • File personal and business taxes as early as possible to help reduce chances of a crook filing a fraudulent return in someone else’s name.
  • Important business or personal documents should always be kept safe.
  • Ensure business computers are password-protected and software is kept current.
  • Review your business credit report regularly.
  • Work with reputable accountants and lawyers who can give you sound advice.

Here are red flags to watch for:

  • The IRS rejects an e-filed return or refuses an extension request because there is already a duplicate EIN or Social Security number on file.
  • You receive a notification that you could be an identity theft victim.
  • You’re not receiving expected mailings from the IRS.

Taking the right precautions can protect both you and your employees.