San Francisco Tax Preparation / CPA: IRS Guidance on Identity Theft Involving Unemployment Benefits

Filed in CCH NEWS FEED by on March 24, 2021

The IRS urges taxpayers who receive Forms 1099-G, Certain Government Payments, for unemployment benefits they did not actually get because of identity theft to contact their appropriate state agency for a corrected form.

Some taxpayers who faced unemployment or reduced work hours due to COVID-19 pandemic applied for and received unemployment compensation from their state. These benefits are taxable income under federal law. However, scammers also took advantage of the pandemic by filing fraudulent claims for unemployment compensation using stolen personal information of individuals who had not filed claims. Payments made as a result of these fraudulent claims went to the identity thieves, and the individuals whose names and personal information were taken did not receive any of the payments.

The IRS previously issued guidance requested by states on identity theft guidance regarding unemployment compensation reporting. Taxpayers do not need to file a Form 14039, Identity Theft Affidavit, with the IRS regarding an incorrect Form 1099-G. The IRS points taxpayers to the Identity Theft Central webpage at for more information about the signs of identity theft and general steps that should be taken.

If taxpayers are concerned that their personal information has been stolen and they want to protect their identity when filing their federal tax return, they can request an Identity Protection Pin from the IRS.