Employee? Beware of this IRS Tax Form 1099-G ID scam
If you’ve managed to stay employed throughout the COVID-19 pandemic, count yourself lucky, but identity fraudsters may see you as easy prey.
And you might not find out that you had your ID stolen when you get ready to do your taxes.
Here’s how the scam goes: You had a regular salary in 2020, but your state sends you a Form 1099-G for Unemployment Compensation 2020 that you never received. Why? Because the crooks used your stolen personal data to file an unemployment claim to which the real one you are not entitled. Then they cashed the checks your state sent them.
A Form 1099-G is taxable income documentation that is sent to both unemployment beneficiaries and the IRS to report how much money individuals received and what was withheld.
“During 2020, millions of taxpayers have been impacted by the COVID-19 pandemic through the loss of jobs or the reduction of work hours,” the IRS said. “Some taxpayers facing unemployment or reduced working hours have applied for and received unemployment benefit from their state. However, crooks have also taken advantage of the pandemic by filing fraudulent claims for unemployment compensation. “
According to the US Department of Labor, 10.1 million Americans are currently out of work. The unemployment rate peaked in April at 14.7%, the highest since the federal government began collecting data in 1948.
The start of the current tax season has been delayed from the traditional end of January to February 12 due to the pandemic. The deadline remains April 15, although last year’s deadline has been extended to July 15.
“[Scammers] are shooting in the dark, because of what happened this year. What is the percentage of people unemployed this year? These crooks are sophisticated, ”explains Alison Gadoua, a specialist in tax controversies at the accounting firm Prager Metis. Fast business.
There are a number of scenarios that could help crooks to be successful: stealing your full identity; using only your ripped social security number; create a false employer company name; using the name of an actual business that has closed.
The IRS advises people who have had their ID cards stolen this way to ask their states to send them corrected 1099-Gs, while filing their tax returns, noting only the income they have. actually received. Also, request copies of credit reports, think about the credit freeze, and file a complaint with the National Center for Disaster Fraud at the United States Department of Justice.
The pandemic has unleashed a variety of new, contemporary identity theft scams, including those involving personal information slipped into COVID vaccine cards posted on social media.