The Daily Item

HARRISBURG — Pennsylvania Treasurer Stacy Garrity said she has urged the Internal Revenue Service to take immediate steps to ensure that Pennsylvania taxpayers victimized by identity theft and unemployment compensation fraud are not penalized when it comes to federal taxes.

“Across the country, state unemployment benefit programs have been subject to fraud on an unprecedented scale,” Garrity said this past week.

“Despite everyone’s best efforts to mitigate the problem, we’ve seen it here in Pennsylvania, too.

Now, Treasury is being contacted by thousands of people who are receiving 1099 forms that show unemployment compensation income they never received – and are facing a tax bill based on criminal activity they had no part in. The IRS must take immediate, decisive action to make sure these innocent Pennsylvanians are not penalized on their federal tax bills.”

In July 2020, the FBI reported “a spike in fraudulent unemployment insurance claims complaints related to the ongoing COVID-19 pandemic involving the use of stolen personally identifiable information.” Recently, 1099 tax forms based on those fraudulent claims have started arriving at the homes of unsuspecting Pennsylvanians.

“Treasury worked diligently with the Pennsylvania Department of Labor & Industry and state and federal law enforcement agencies to implement safeguards against fraud,” Garrity said.

“We prevented many problems, but we could not prevent them all. Now the IRS must step up to ensure that innocent Pennsylvanians are not victimized a second time.”

Pennsylvanians who have received 1099G tax forms in error can find guidance on Treasury’s website. Those who believe they are the victim of unemployment fraud should file a report with the Department of Labor and Industry immediately.

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