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Unemployment fraud at tax time
Old 02-06-2021, 05:37 PM   #1
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Unemployment fraud at tax time

I discovered back in May 2020 that someone possibly is using my identity to obtain fraudulent unemployment compensation in Washington state. I filed a online report (twice!) which was the only way they offered to report this due to I guess a flood of reports or lazy ass government (pick one).

They had a auto reply to my report:

"You successfully uploaded your report of fraud. Your confirmation number is xxxxxx.

Next:

We will lock this claim, it will no longer be associated with your personal information.
We will review the submitted information and investigate.
When our investigation is complete, we will send you a letter.
Your patience is appreciated while we conduct this investigation. We will not discuss details of the investigation and will not provide updates."


I never received any updates or letter and pretty much got on with my life since we are retired and don't need to file unemployment anyway. I then realized now that I might get some sort of tax form wanting me to pay money for the stupidity of Washington state. I just checked and I still can't log in using my SS number to their online site because my SS is being used by some email (hidden) that ends in yopmail.com I have never heard of that domain.

Is this going to be a big hassle for me? Can I sue Washington state? Maybe a class action?
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Old 02-06-2021, 07:49 PM   #2
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I don't think suing the government is going to gain much traction for you.

It could be a big hassle. Hassle is measured in terms of number of phone calls and total number of hours spent on hold.

I would call the state income tax/revenue department and ask for their help. Plan 2 hours mininum for the first call, 4 hours is better. Try calling immediately when their phone support system opens. This means sitting at your computer with the number in front if you not less than 15 minutes before the phone support hours open. This is to minimize queue (hold) time.
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Old 02-06-2021, 08:05 PM   #3
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Last spring, Washington state had close to $600,000 stolen due to fraud. The state has been eerily quiet about the status of the investigation and recovery of the money.
In addition the system was just breached about a week ago impacting about 1.6 million Washingtonians (SS number, driver license, bank account numbers and employment information).
It was just announced that the WA state ESD Commissioner, Susie LeVine was just appointed to a position in the Biden administration leaving the mess in Washington state behind.
I hope your information was not marginalized by the recent hack. The agency should be reaching out to all those impacted by the hack.
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Old 02-06-2021, 10:42 PM   #4
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This is the info AARP sent out to the Tax Aide volunteers a couple of days ago about how to handle this situation on Federal returns.

Quote:
Unemployment Compensation Fraud
There are reports of many fraudulent unemployment compensation claims this past year and that taxpayers are now receiving Forms 1099-G that report income they never received.
The IRS guidance is:
• The issuing State Office of Unemployment should issue a corrected Form 1099-G. (However, many of the state agencies are backed up in processing unemployment claims and may not be able to verify the “not paid” claim in a timely manner.)
• Only report the income actually received on the tax return even if a corrected form has not been received. (In this case, Counselors should alert the taxpayer that the IRS may send a notice questioning the difference.) See Pub 4012 NTTC Modified TY20 Rel 2a pg D-3 for more information including how to add an explanation in TaxSlayer.
• Taxpayers should NOT file Identity Theft claims in these circumstances
• Returns may be e-filed following normal procedures
Note – the reporting of fraudulent unemployment compensation payments on state tax returns may vary from the above – check with your state leadership for guidance.
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Old 02-07-2021, 08:13 AM   #5
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Quote:
Originally Posted by Fermion View Post
... Is this going to be a big hassle for me?...
I suspect not. Same thing happened to a friend... an unemployment claim was made using her deceased husband's SS number... I suggested that she not worry about it. Yours is a bit different situation because you're still living.

Even if you receive a tax form just ignore it since it isn't income for you... eventually the IRS might come asking about it and you can explain it to them then.

Quote:
Originally Posted by Fermion View Post
.... Can I sue Washington state? Maybe a class action?
Yes, you definitely can. Good luck.
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Old 02-07-2021, 08:45 AM   #6
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Fermion,

Do you have a full credit/security freeze in place at the 3 major credit bureaus?

I ask for two reasons:
#1) I am curious if they were able to execute this fraud despite having credit freezes in place?

#2) If you don't currently have this, you might want to put them in the place going forward.

I use to worry about identity theft 15 years ago.
I stopped worrying after I understood how the concept of a full credit/security freeze works and put them into place.

I hope that this incident does not cause you too much fallout.

-gauss
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Old 02-07-2021, 09:26 AM   #7
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Quote:
Originally Posted by gauss View Post
Fermion,

Do you have a full credit/security freeze in place at the 3 major credit bureaus?

I ask for two reasons:
#1) I am curious if they were able to execute this fraud despite having credit freezes in place?

#2) If you don't currently have this, you might want to put them in the place going forward.

I use to worry about identity theft 15 years ago.
I stopped worrying after I understood how the concept of a full credit/security freeze works and put them into place.

I hope that this incident does not cause you too much fallout.

-gauss
Hi, yes I do have the freezes in place.

I technically don't *know* that any unemployment money was paid out to someone under my info but the state has not responded to my inquiries or report at any time in the past 7 months. They did cash my check for my auto tabs in 24 hours though.
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Old 02-07-2021, 09:30 AM   #8
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Quote:
Originally Posted by Dog View Post
Last spring, Washington state had close to $600,000 stolen due to fraud. The state has been eerily quiet about the status of the investigation and recovery of the money.
In addition the system was just breached about a week ago impacting about 1.6 million Washingtonians (SS number, driver license, bank account numbers and employment information).
It was just announced that the WA state ESD Commissioner, Susie LeVine was just appointed to a position in the Biden administration leaving the mess in Washington state behind.
I hope your information was not marginalized by the recent hack. The agency should be reaching out to all those impacted by the hack.

Summary of above: incompetence runs rampant in WA ESD.


OP you might want to include a copy of the fraud info with your tax returns to help with any discrepancy in processing of tax returns.
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Old 02-07-2021, 07:00 PM   #9
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Originally Posted by Fermion View Post
Hi, yes I do have the freezes in place.
Me too.

At this point, I think we can assume all of our personal information has been accessed by one hacker or another. It's clear the only way to effectively deal with this issue is to remove the value related to that information, starting with Social Security numbers, by establishing other methods of verifying identification and accessing accounts. However, all we're offered each time is a flimsy band-aid: free credit monitoring for a couple of years.
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