EA Prompts Action on Unemployment Fraud

In January, EDD began sending almost eight million Forms 1099-G to Californians following a record amount of unemployment benefit claims in 2020. Form 1099-G reports the total taxable income EDD issues taxpayers in a calendar year, including Unemployment Insurance, Pandemic Unemployment Assistance, Disability Insurance, Disaster Unemployment Assistance, and Paid Family Leave. These payments must be reported on federal tax returns, but they are exempt from California state income tax.
After learning about the magnitude of identity theft unemployment fraud, Big Valley Chapter Member Laura Strombom, EA reached out to KCRA Channel 3 about how victims could be facing a huge tax problem. In fact, these identity theft victims may have no idea that they have a problem until after they file their taxes. Ms. Strombom noted that resolving identity theft with IRS had been taking as long as three years even before the pandemic.
Central Valley Congressman Josh Harder first learned about the problem from KCRA, prompting him to write to IRS and EDD. Then, after hearing Ms. Strombom’s concerns, he is urging both agencies to act even faster. Watch the video and read the full article here.