What to do if you receive a tax form for unemployment benefits you never applied for

Newsroom Newswire

Now that it’s tax season and tax forms are arriving in the mail, many people are beginning to find a surprise in their mailbox: an IRS form 1099-G reporting unemployment benefit income that they did not actually apply for or receive.

If you receive a form 1099-G but did not file for unemployment, someone may have stolen your identity to commit unemployment fraud.

Los Angeles attorney David Fleck, who has experience in fraud cases, said it is one of the easiest frauds to perpetrate and has become common during the pandemic. As unemployment numbers swelled, unemployment departments across the country became overwhelmed with applications and made thorough background checks of applicants fall by the wayside.

“I’ve seen so many different scams in my career, and frankly there is nothing new under the sun,” he said. “Because these are unusual times, con artists are just using this moment as a way to take advantage of the system.”

Learning that your identity has been used to perpetrate a fraud can be a stressful experience, Fleck said, but there are steps you can protect yourself and mitigate the damage.

Report the fraud to the California employment development department, https://www.edd.ca.gov/. California Employment Development Department has a form on their website to use for reporting identity theft and unemployment fraud or call the EDD fraud hotline at 1-800-229-6297.

File your taxes as normal and do not report the fraudulent income. If you’ve reported the fraud to EDD, that’s all you need to do. You don’t need to also report it to the IRS, Fleck said.

If you suspect you may be a victim of a broader identify theft, you may want to check the website of The Identity Theft Resource Center, a nonprofit in San Diego. Visit http://idtheftcenter.org or call 888-400-5530.

“Fraudsters never let a crisis go to waste,” Fleck said. “But hopefully, now that state officials know this fraud is going on in such large numbers, innocent victims won’t be on the hook.”