Tax forms and cash and a calculator

Running a business already requires you to juggle revenue, clients, payroll, compliance, marketing, and operations. Scammers know that, and they count on the fact that many women and LGBTQ+ business owners are already doing the work of three people — which leaves less time to double-check every message.

Tax scams targeting small business owners are not just a “tax season” issue. They happen year-round, and they can affect your payroll data, your Employer Identification Number (EIN), your accounting software, and even your employees’ identities.

For example, your bookkeeper forwards an email that looks like it came from you, urgently requesting all employee W-2s. Or you receive a voicemail saying your EIN is linked to “fraudulent activity” and you must call back immediately.

These situations are stressful — by design.

This guide walks through the most common tax scams affecting small businesses — particularly women- and LGBTQ+-owned businesses that often operate with lean teams — and explains what to watch for and what simple controls reduce risk.

Most businesses at your stage already work with a bookkeeper, accountant, or tax professional. This article is meant to help you and your advisors spot scams faster and respond with less stress.

No technical background required.

Why Small Businesses Are Frequently Targeted

Scammers go where the opportunity is. Small businesses present opportunities for three main reasons.

You Handle Sensitive Data

Even very small companies manage:

  • EINs
  • Payroll records
  • Contractor 1099s
  • Bank account information
  • Accounting system logins

That information is valuable.

As women-owned businesses grow and cross key revenue thresholds, they often hire quickly — which means more payroll data moving through systems at exactly the stage when internal controls may still be informal.

You May Not Have Formal Internal Controls

Large companies require multiple approvals before releasing payroll or financial data.

Many small businesses rely on one person — sometimes the owner — to manage taxes and payroll. Even if you have a bookkeeper or small finance team, you may not have written rules about how sensitive tax information is shared.

Scammers look for that gray area.

You’re Busy

Tax-related messages naturally create urgency. When you’re under deadline pressure, it’s harder to slow down and verify.

For women and LGBTQ+ founders navigating funding gaps or bias in professional settings, it can feel uncomfortable to push back on an authority-sounding request. Scammers exploit that hesitation.

The issue isn’t carelessness. It’s bandwidth.

The Most Common Tax Scams Affecting Small Businesses

Below are the scams that appear most frequently in small business environments — along with practical ways to respond.

IRS Impersonation Scams

This is one of the oldest scams — and it still works.

You may receive:

  • An email claiming there’s a problem with your business tax filing
  • A text about a “tax compliance issue”
  • A voicemail threatening legal action

Here are the key facts:

  • The IRS initiates tax collection and enforcement matters through official mailed correspondence.
  • The IRS does not start those conversations by email, text, or social media.
  • The IRS does not demand immediate payment by gift card, wire transfer, or cryptocurrency.

IRS scams targeting small business owners rely on fear and urgency. If a message pressures you to act immediately, that’s a warning sign.

Here’s a simple response script:

I don’t give out information over the phone or by text. I’ll contact the IRS directly using the number on their official website.

Then hang up. Go to irs.gov by typing it directly into your browser. Use contact information listed there.

Payroll & W-2 Phishing (Often Called “CEO Fraud”)

This scam targets your internal team.

An employee, bookkeeper, or contractor receives an email that appears to come from you:

“Can you send me all employee W-2s right now? I need them urgently.”

The display name may look correct, but the email address is slightly altered. In some cases, attackers compromise a real account and send the message from there.

If successful, this exposes:

  • Employee Social Security numbers
  • Home addresses
  • Salary data

This payroll phishing scam can trigger identity theft, reporting obligations, and significant trust damage.

Make it easy for your team by setting a written rule:

If anyone — including you, your CPA, or your payroll provider — emails requesting W-2s or full payroll reports, follow your verification rule first.

Verification might mean calling a known number or confirming in your established collaboration platform before sending anything.

That pause is a protective step, not a slowdown.

Fake Tax Preparers

Not all tax scams arrive by email.

Some involve individuals posing as legitimate tax professionals.

Red flags include:

  • Promises of unusually large refunds
  • Fees based on the size of your refund
  • Refusal to sign the return
  • Requests to sign blank forms
  • No Preparer Tax Identification Number (PTIN)

Even if a preparer commits fraud, you are responsible for what is filed under your EIN.

If you already have a trusted tax professional, this section is about protecting that relationship from impostors and properly vetting any new advisors. A qualified professional will expect thoughtful questions and welcome them.

EIN Theft & Business Identity Theft

Business identity theft involving an EIN can take months to resolve.

Scammers may:

  • File fraudulent tax returns under your EIN
  • Open business credit accounts
  • Submit fake payroll filings
  • File fraudulent unemployment claims

You may not notice until you receive a notice about a return you didn’t file, you’re denied credit, or a government agency contacts you.

Prevention is far easier than cleanup.

Share your EIN only when legally required. Store it in restricted-access systems, and periodically review your business credit reports.

Small business identity theft is harder to unwind than to prevent.

Fake “Tax Transcript” or Document Links

You might receive emails such as:

“Updated tax transcript available.”
“Download your corrected 1099.”
“Important payroll adjustment attached.”

The link may lead to a fake login page, a malware download, or a site designed to steal your accounting credentials.

Once attackers gain access to accounting, payroll, or email systems, they can pivot quickly into financial fraud.

Never click tax-related links in unsolicited emails. Instead, manually type the official website address into your browser or use a bookmark you created yourself.

State Tax Impersonation

Scammers also impersonate state revenue departments.

Messages often reference sales tax compliance, payroll tax penalties, or business license suspension.

Many states do use email for some communication, but legitimate messages will stand up to independent verification. Go directly to the official state website or ask your bookkeeper or tax professional to help you verify.

A Pattern You’ll Notice in Almost Every Tax Scam

After working with many small business owners on fraud response, the patterns are consistent.

Most tax scams include:

  • Urgency (“Immediate action required.”)
  • Authority (IRS, state agency, CPA impersonation)
  • Isolation (“Handle this confidentially.”)
  • Unusual payment methods (gift cards, crypto, wire transfers to unknown accounts)

When you recognize the pattern, you’re less likely to react emotionally. Most scams collapse when you slow down and verify through a channel you control.

How to Evaluate a Suspicious Tax Message

Use this structured approach.

Step 1: Pause

Urgency is the primary tool scammers use. Give yourself space before responding.

Step 2: Check the Channel

Ask yourself:

Was this sent via email or text claiming to be from the IRS?
Is this an unexpected request for W-2s, 1099s, payroll reports, or bank details?

The IRS initiates tax enforcement matters by mail. Your payroll provider or CPA may email you, but they should never object to independent verification.

Step 3: Examine the Payment Request

Government agencies do not request payment via gift cards, cryptocurrency, or wire transfers to unusual accounts.

Immediate payment demands with threats attached are major red flags.

Step 4: Verify Independently

Do not use the contact information in the suspicious message.

Visit the official website by typing the URL yourself. Call a number from a prior verified notice. Contact your tax professional using known contact details.

Verification is a risk-management practice, not distrust.

Practical Steps to Reduce Your Risk

You do not need advanced technical knowledge. Focus on a few high-impact controls.

Enable Multi-Factor Authentication (MFA)

Turn on MFA for your accounting software, payroll platforms, business email, and tax filing portals.

MFA dramatically reduces the risk of account compromise, even if a password is exposed.

Create a Written Payroll Data Policy

Establish a clear rule that no W-2s, 1099s, or payroll reports are released without direct verbal confirmation or verification through a pre-established internal channel.

Document it. Review it annually. Share it with anyone who handles financial data.

Limit and Protect Your EIN

Share it only when legally required. Store it in restricted-access systems, and monitor business credit periodically.

Vet Tax Professionals Carefully

Before engaging a preparer, verify their PTIN, confirm credentials, use a written engagement agreement, and review your return before signing.

Never sign blank or incomplete forms.

Train Your Team Briefly

Even a 15-minute annual discussion covering common tax scams, your verification rule, and who to contact internally can significantly reduce exposure.

If You Only Do Three Things After Reading This

  • Turn on MFA everywhere.
  • Create a written W-2 verification rule.
  • Make verification an expected part of your team culture.

These three steps prevent a large percentage of tax-related incidents in small businesses.

What to Do If You Suspect a Tax Scam

If you believe you’ve interacted with a scam:

  • Stop communication immediately.
  • Secure accounts by changing passwords and enabling MFA.
  • Contact your tax professional or bookkeeper.
  • Report the incident to the IRS and the Federal Trade Commission, following their guidance.
  • Consider placing a freeze on your business credit.
  • Document what happened, including dates and screenshots.

Responding quickly limits damage. Most situations are manageable when addressed early.

A Final Note

Tax scams targeting small business owners are designed to create pressure and override judgment.

You do not need to memorize every variation. You need a habit of pausing, independent verification, basic account protections, and clear internal rules around payroll and tax data.

Those systems protect the business you’ve worked hard to build without adding unnecessary complexity.

If you’d like, share this article with your bookkeeper or accountant and use it as a starting point for a short conversation: Where are we strong, and where do we need to tighten up?

That discussion alone significantly reduces risk.