The Department of Labor creates a site for victims of unemployment fraud


The US Department of Labor launched a website Monday to help Americans report identity fraud related to unemployment benefits.

Unemployment fraud has exploded during the Covid pandemic. Much of it is related to organized crime networks that bought identity information stolen in past data breaches, according to the labor office.

Criminals use this data to claim benefits on behalf of others.

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Victims may only have discovered the theft during tax season, as unemployment agencies issued 1099-G tax forms, reporting annual unemployment income, to millions of people. These people will have received an erroneous tax form or for unemployment benefits that they never collected.

Employed persons have also received notifications from their company asking about an unemployment claim submitted on behalf of the worker.

The new Department of Labor website offers a directory of each state’s contact method for reporting this type of unemployment fraud.

What to do

Scammed taxpayers ultimately do not have to pay the associated tax. Victims must report the fraud to the state where the theft occurred. They must take other steps as well.

For example, states are required to issue an amended 1099-G tax form to those who received it in error or with errors. But taxpayers shouldn’t wait for the amended form to file their taxes, according to the Department of Labor. They must 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 those individuals, according to the Department of Labor.

Victims should check their credit report for suspicious activity and report unemployment-related identity theft to the US Department of Justice’s National Center for Disaster Fraud.

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