The U.S. Department of Labor launched a website Monday allowing Americans to report identity fraud related to unemployment benefits.
Unemployment fraud has increased during the Covid pandemic. Much of this has to do with organized crime rings who, according to the labor office, bought identity information stolen in previous data breaches.
Criminals use this information to request benefits on behalf of others.
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Victims may not have discovered the theft until tax season, when labor offices issued 1099-G tax forms to millions of people showing annual unemployment income. Such individuals have received a tax form with errors or unemployment benefits that they never received.
Employees have also received notices from their company asking them about an unemployment claim filed on behalf of the employee.
The Department of Labor’s new website provides a directory of each state’s contact method for reporting this type of fraud.
What should I do
Fraudulent taxpayers ultimately don’t have to pay the associated tax. Victims must report the fraud to the state where the theft took place. There are also other actions that you should take.
For example, states must issue an amended 1099-G tax form to those who received one in error or in error. However, taxpayers shouldn’t wait for the amended form to submit their taxes, according to the Department of Labor. They should file their taxes with the correct amount of unemployment income.
Those who have already filed their taxes should not file an amended tax return. The IRS will issue additional guidance for these individuals, according to the Department of Labor.
Victims should check their credit reports for suspicious activity and report unemployment-related identity theft to the Department of Justice’s National Center for Disaster Fraud.