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Warning that cyber criminals have “shifted their targets to those of you in the payroll industry,” an IRS official outlined steps the agency is taking to inform and minimize the stealing  and misuse of tax data from employers and employees.

Speaking Friday morning at the Federal Government Executive General Session at the APA’s Annual Congress, Tamara Powell, Acting Director of the IRS Return Integrity Compliance Services (RICS), noted a dramatic increase in the number of employers reporting that they had been targets of a scam that fools payroll and other administrative employees into thinking they are answering requests for Forms W-2 information from those in high positions.

In the first four months of 2017, about 200 employers reported falling for the scheme and sending W-2 data to criminals and losing data.

“Two hundred organizations may not sound like a lot, but that data theft or data loss can translate into hundreds of thousands of taxpayers,” Powell said.

The session detailing the IRS’ work to prevent tax fraud and identity theft impressed attendees.

“I run a small company, and I appreciate the efforts to prevent fraud,” said Pam Gordon, Payroll Manager for Mizuho Orthopedic Systems. “The IRS is very prudent in what they are doing to combat identity theft. "If you notify them they will come in and track them down.”

The Director of the U.S. Census Bureau, John Thompson, also addressed the audience and spoke about the upcoming economic census that relies on employers to voluntarily provide payroll-related data every five years. The plan is to start collecting the data for 2017 in early 2018, he said. The data collected fuels the local, state, and national statistics used for planning and decision-making, he said.

Thompson said cybersecurity is an important issue with this effort as the Economic Census is to be conducted fully online.

Attendees also said the session made clear to them why the government wants their employees’ Forms W-2 early in the year because identity theft can take advantage of the gap at the end of the tax year to file fraudulent claims ahead of the real taxpayers.

“What I got [from the session] was there is really good Intelligence gathered by the IRS,” said Richard Olmstead, who works as an administrator for Morrison Mahoney LLP in Lowell, Massachusetts.

Full reports on the government session speakers are to be available at a special Bloomberg BNA site dedicated to coverage of the APA’s 35th Annual Congress.