Just about anyone can create a fake pay stub or W-2 online with just 15 minutes, five dollars, and a decent internet connection.

Fraudsters can then use those fraudulent documents to establish proof of income and complete a variety of other financial activities, such as applying for a loan, leasing a new car, or renting a luxury apartment. For loan applicants, verifying a borrower's income is crucial to prevent the use of false information in financial decisions.

As digital fraud becomes more commonplace, organizations like banks, credit card companies, lenders and rental agencies need to take steps to protect themselves. In this post we explore some common ways to spot a fake W-2 form or pay stub, as well as how advanced technology can be used to automate the document review process to improve efficiency, make more accurate decisions and reduce risk.

Try It Yourself: How Inscribe Detects Fake W-2s

Want to see exactly how Inscribe catches forged W-2 forms in seconds?

Take an interactive product tour below to explore how our AI-powered fraud detection works behind the scenes. No sign-up required!

In this short walkthrough, you’ll learn how Inscribe:

• Analyzes W-2 templates to spot formatting inconsistencies
• Flags mismatched income and tax data using smart fraud signals
• Detects metadata tampering and document manipulation
• Surfaces red flags instantly, with clear audit trails for reviewers

Whether you're a lender, underwriter, property manager, or fraud ops leader, you'll see how fast and easy it is to identify fake W-2s using automation and machine learning.

What is a W-2?

A W-2 is a tax form issued by an employer to document each employee’s wages and salary information, as well as annual taxes paid. Employers are responsible for accurately reporting employee wages, benefits, and taxes withheld on the W-2 form. An employer is required by law to provide a copy of the form to the employee, as well as to the Internal Revenue Service (IRS), each tax season.

Employees use the information on a W-2 to file their taxes with the IRS. The IRS uses the same form to confirm that the information submitted by the individual on their personal tax return matches the records submitted by the employer. The W-2 is used to report income and is cross-referenced with tax returns to ensure accuracy and detect discrepancies. In so doing, it is possible for the IRS to identify and investigate any discrepancies between the documentation submitted by the employee and their employer.

What information is included on a W-2?

• Company name, address, and employer identification number (EIN) (verifying the employer's details is important for authenticity)
• Employee name, address, social security number (SSN) or tax identification number (TIN) and other personal information
• Annual wages, tips, and other salary compensation, such as bonuses (other forms of compensation)
• Employee benefits received during the year
• Tax withholdings and deductions, including taxes withheld for federal income tax, Social Security tax, Medicare, and other deductions
• State ID Number and control number

How is a W-2 different from a pay stub?

When it comes to establishing proof of income, the main difference between a W-2 and a pay stub has to do with the period of reporting. A W-2 is issued annually and presents a total view of a person's income and tax withholdings for a particular employer for the tax year. A pay stub, on the other hand, contains much of the same information but only reports the information for a specific pay period, plus the total figures to date.

Another difference is that a W-2 reports the person's taxable income, while a pay stub reports their gross wages. For this reason, some employees may notice discrepancies between the annual figures on their final pay stub and W-2.

For example, contributions made to a company-sponsored retirement plan, such as a 401K, reduce a person's taxable income. As such, the pay stub will show a person's gross income, which includes the 401K contribution; on the other hand, the W-2 will show the taxable income, which does not include the retirement contribution since it is tax deductible.

Other discrepancies can be attributed to non-taxable income items, such as mileage, or the application of a pre-tax deduction, such as health insurance payments.

Organizations have two main options when reviewing W-2s and pay stubs:

1. Manual review: An underwriter, accountant, or other authority reviews the document content and metadata by hand and uses their knowledge and expertise to identify potential instances of fraud.
2. Digital review: Artificial intelligence or machine learning software automates the document review process and compares submitted files against known authentic files to identify signs of manipulation or tampering that are often invisible to the naked eye.

Manual review of W-2s

For decades, organizations relied on skilled document analysts to conduct manual document reviews. Today, these checks are considered obsolete for lenders, mortgage companies, banks, government agencies and other sizable established organizations since fraud detection software helps alleviate the pains of manual reviews, which are time-consuming, error-prone, and subject to human bias.

However, for some small businesses or independent property owners, it may be impractical to purchase or maintain document review software to review occasional rental applications or tenant checks. In those cases, the business manager or landlord can follow these steps to assess the validity of the W-2 or pay stub:

Check the document formatting

A W-2 is a standard tax form created by the U.S. government. As such, the information contained in the document is formatted in a specific and consistent way. While the financial figures and information within the W-2 is unique to the individual, the form itself – meaning its format, template, structure, fonts, logo positioning, spacing and other attributes – should be indistinguishable from one document to the next. 

If a document appears to have formatting inconsistencies as compared to known authentic forms, or if basic information appears to be missing or misplaced, then it is possible that the document has been forged.

Review the document for content inconsistencies, spelling errors, typos and other mistakes

When reviewing a W-2 form, it’s crucial to look beyond surface details and carefully examine the document for content inconsistencies, spelling errors, typos, and other mistakes that may signal fraud. Pay special attention to critical information such as the Employer Identification Number (EIN) and Social Security Number (SSN). Even a single incorrect digit can be a red flag. Double check that the employer’s name, address, and other identifying details match official records, as discrepancies here often indicate a fake W-2.

While a manual review process can help identify these issues, it is often time consuming and may not catch every instance of incorrect information or subtle manipulation. Financial institutions and government agencies increasingly rely on machine learning software to verify income and detect fraud in W-2 forms. These advanced tools can quickly scan for spelling errors, mismatched data, and other red flags that might be missed by the human eye, helping to reduce risk and ensure the integrity of the verification process. By combining manual review with automated fraud detection, organizations can more effectively identify and prevent fraudulent documents from slipping through the cracks.

W-2s and pay stubs are produced automatically via accounting software and should appear neat and orderly. Keep a look out for any of the below errors which may indicate the form has been forged, edited or manipulated:

• Spelling errors and other typos
• Blurry text or logos
• Inconsistent margins or spacing
• Incorrect currency symbols, date formats, addresses or formatting of numerical figures
• Use of several fonts, differing font sizes or unique font types
• Misalignment of all numerical figures or digits
• Use of upper case (O) in place of a zero (0)
• Excessive presence of whole or rounded numbers

In the case of pay stubs, reviewers can also look out for:

• Missing check numbers, sequential check numbers or other discrepancies in check numbers
• Variation in pay dates
• Inconsistencies in the year-to-date income and other figures

Check document sums

Many forged documents fail to pass simple math checks and calculations. For example, the tax rate paid by the individual should be consistent with their income level. In some cases, when people inflate their salary, they fail to raise their tax payments, social service payments, retirement contributions, and other variable items.  

Verify the company and employment history

One of the best ways to authenticate a document is by confirming the identity of an individual or company via independent web search. Assuming the person or business exists, the reviewer can take the additional step of contacting the Human Resources department to confirm the individual is employed by the company and for the period in question, which involves reaching out to the employer listed on the W-2 form. In most cases, the HR representative will not confirm the employee’s salary, but this process is instrumental in establishing the baseline of credibility.

Please note that reviewers are recommended to contact the company using a phone number, email address or other contact information gathered through a web search or other independent research. This is to avoid inadvertently emailing or calling a fictious contact, using contact details provided by applicants.

What to do if you think a W-2 or pay stub has been forged

If you are on the receiving end of what you believe to be a manipulated or forged W-2, there are a few steps you can take:

Request additional information from the individual to ensure figures and facts align. Supporting documentation may include:

• A letter of employment or employment verification letter, sent by a verified representative of the company
• Additional tax forms, such as the 1099 tax form or IRS Form 1040
• 3-6 months of bank statements

If you suspect that you are the victim of a W-2 scam, it is a good idea to contact the relevant local authorities to discuss your concerns. We urge people to submit any suspicious documents for further review or to the appropriate authorities. While this may seem like an outsized step to take, it is important for everyone to do their part to reduce the risk of fraud by identifying and reporting suspicious or criminal behavior. Failure to do so has wide-reaching implications, including higher interest rates for consumers and higher write-off rates for banks and lenders.

Preventing tax scams

Preventing tax scams starts with education and awareness. The Internal Revenue Service (IRS) regularly issues guidance to help individuals and organizations recognize the warning signs of tax scams, such as unsolicited phone calls, suspicious emails, or letters requesting sensitive financial information. It’s important to remember that the IRS will never demand immediate payment or ask for personal details over the phone or email.

For property managers and lenders, verifying income and employment history is a key step in reducing the risk of fraud and ensuring compliance with federal income tax regulations. Using document verification services to confirm the authenticity of W-2 forms and other tax documents can help protect against scams and fraudulent activity. By staying informed about IRS procedures and using reliable verification methods, both individuals and organizations can better protect themselves and their financial information from tax-related fraud.

Automated document reviews

For more established organizations, the manual review process is neither an efficient or an effective way to check documents like W-2s or pay stubs submitted by applicants. This is because many signs of fraud or manipulation are invisible to the human eye and may go unnoticed by the reviewer. In addition, manual document reviews can take up to 10 minutes, whereas an automated document review system can complete the document check in mere seconds.

Automated document review systems have become especially important in detecting fraudulent claims for unemployment benefits, which saw a significant rise during pandemic relief efforts.

For organizations such as banks and lenders who are processing large amounts of loan applications or credit requests, it is essential to adopt a technology-enabled document review solution that includes the following capabilities:

• Built-in fraud detection software to review the document’s metadata, file forensics, and template;
• AI models and advanced algorithms to check every aspect of a submitted document and cross reference it with millions of known examples to confirm its accuracy and authenticity; and
• ML capabilities that allow the machine to learn over time, helping it to become more precise and accurate as the model is exposed to more and more examples and continues to build its data library.

The role of machine learning in fraud detection

Machine learning has become an essential tool in fraud detection, especially when it comes to verifying W-2 forms and other financial documents. By analyzing large volumes of data, machine learning software can identify patterns and anomalies that may indicate fake documents or fraudulent activity. For example, these systems can cross reference information from pay stubs, bank statements, and other documents to spot inconsistencies in income verification.

Lenders, property managers, and government agencies benefit from machine learning’s ability to flag red flags quickly and accurately, reducing risk and improving the efficiency of the review process. Whether it’s detecting subtle signs of document tampering or identifying discrepancies in a borrower’s income, machine learning software helps organizations stay ahead of fraudsters and protect the integrity of their financial transactions.

Best practices for document verification

To effectively verify documents and prevent fraud, organizations should adopt a combination of manual review, automated processing, and thorough verification of supporting documentation. Key best practices include:

• Checking for spelling errors, typos, and formatting inconsistencies in W-2 forms, pay stubs, and other documents.
• Using machine learning software to confirm the authenticity of submitted documents and detect subtle signs of manipulation.
• Conducting regular audits and quality control checks to maintain high standards in income verification and fraud prevention.
• Cross-referencing supporting documentation such as employment verification letters and bank statements to confirm information accuracy.
• Leveraging resources like the Social Security Administration to verify Social Security Numbers and identify fake documents using advanced technology.

By following these steps, lenders, property managers, and government agencies can reduce risk, improve verification accuracy, and better protect sensitive financial information from fraud.

How to Detect a Fake W-2 with Inscribe

Spotting a fake W-2 isn’t always straightforward, especially as document fraud becomes more sophisticated and accessible. In many cases, forged W-2 forms are designed to mimic authentic documents down to the font, spacing, and layout. That’s why manual reviews are no longer enough.

Inscribe makes detecting fake W-2 forms faster, easier, and more accurate with AI-powered document fraud detection.

The Smarter Way to Spot Fake W-2 Forms

Inscribe uses a combination of rules-based logic, machine learning, and advanced document forensics to identify forged W-2s and other income documents in seconds. Here's how it works:

• Template Matching & Format Checks: Our system compares submitted W-2s against thousands of known authentic templates. It flags inconsistencies in layout, structure, fonts, and spacing (common signs of a forged W-2).
• Metadata & File Forensics: Inscribe doesn’t just review the visible content. It also examines the document’s underlying metadata, file history, and digital fingerprints to identify signs of tampering or manipulation.
• Smart Fraud Signals: From altered employer details to mismatched Social Security numbers and incorrect tax amounts, Inscribe’s fraud engine evaluates each W-2 for dozens of high-risk indicators that are invisible to the naked eye.
• Machine Learning Trained on Real-World Fraud: Our AI learns from millions of real and fake documents to constantly improve its accuracy. It detects emerging fraud patterns and adapts faster than legacy systems.

Why use Inscribe to detect fake W-2s?

Organizations that receive W-2s for loan applications, rental approvals, or compliance checks can’t afford to rely on outdated methods. Inscribe helps you:

• Prevent fraud at the source by automatically flagging suspicious W-2s before they impact your business.
• Reduce manual workload with document automation that eliminates the need for slow, error-prone reviews.
• Speed up approvals without sacrificing accuracy or compliance.
• Improve decision-making by pulling structured income and identity data directly from the W-2.

Use Cases

Whether you’re a lender, property manager, fintech, or government agency, Inscribe supports your team in identifying fake W-2s with precision and speed:

• Lenders: Detect inflated income claims before funding loans.
• Tenant Screeners: Validate income documentation during rental applications.
• Credit Platforms: Prevent synthetic identity fraud during onboarding.
• Underwriters: Instantly verify income against known standards and reduce review times.

Don’t Let a Fake W-2 Slip Through the Cracks

Fake W-2s are more common than ever—and increasingly difficult to detect with the human eye. With Inscribe, your team can catch fraudulent income documents early, reduce risk, and maintain trust with every application you process.

See how Inscribe can help you detect fake W-2s and automate document fraud detection — book a demo today.

Frequently Asked Questions (FAQs)

How can you tell if a W-2 is fake?

Fake W-2 forms often contain telltale signs like formatting inconsistencies, typos, mismatched employer or tax data, blurry logos, incorrect EINs, or unusual fonts and spacing. Manual checks can catch some of these red flags, but the most reliable method is using fraud detection software like Inscribe, which reviews the document’s metadata and structure for signs of forgery.

What tools are available to detect fake W-2s?

There are a few tools on the market, but most are either manual or outdated. Inscribe is an AI-powered solution specifically designed to detect fake W-2s, pay stubs, tax documents, and more. It uses rules-based fraud detection and machine learning to compare submitted documents against known authentic templates and identify manipulation that the human eye might miss.

Why would someone fake a W-2?

People may create fake W-2s to inflate their income for loan applications, credit approvals, or rental agreements. This kind of fraud can lead to financial losses for lenders, property managers, and other businesses that rely on income verification to assess risk.

Is it illegal to create or use a fake W-2?

Yes. Submitting a falsified W-2 is a form of document fraud and is considered a criminal offense under U.S. law. It can result in serious legal consequences, including fines and imprisonment. Organizations should take steps to detect and report suspected document fraud.

Can I detect a fake W-2 without software?

Yes, but it’s difficult and time-consuming. You can manually look for issues like spelling errors, incorrect totals, misaligned formatting, and inconsistent employer details. However, sophisticated fakes are often indistinguishable from real documents. That’s why many businesses use automated verification tools like Inscribe to detect fraud quickly and accurately.

How long does it take Inscribe to review a W-2?

Inscribe reviews W-2s and other income documents in just seconds—far faster than manual review processes, which can take up to 10 minutes per document. Inscribe also provides a fraud score, flags suspicious elements, and gives your team a clear decision trail for every review.

What happens if I flag a document as fake?

If you suspect a W-2 is forged, you should request additional supporting documents (like pay stubs or bank statements), verify the employer independently, and report the case to the proper authorities if needed. Inscribe provides a detailed breakdown of fraud signals so you can take appropriate action confidently.