Saturday, October 1, 2022

How To Turn Someone In For Unemployment Fraud

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Justice Department Warns On Fake Unemployment Benefit Websites

Unemployment fraud

The Department of Justice recently warned that fraudsters are creating websites mimicking unemployment benefit websites, including state workforce agency websites, for the purpose of unlawfully capturing consumers personal information.To lure consumers to these fake websites, fraudsters send spam text messages and emails purporting to be from an SWA and containing a link. The fake websites are designed to trick consumers into thinking they are applying for unemployment benefits and disclosing personally identifiable information and other sensitive data. That information can then be used by fraudsters to commit identity theft.

Help stop these scams by reporting them and using the list of state contacts at DOL.gov/fraud.

What Are The Penalties For Unemployment Insurance Fraud

All states are required to assess a penalty of not less than 15% of the amount of the fraudulent payment. Other penalties under state unemployment insurance laws generally include criminal prosecution with fines and/or incarceration required repayment of fraudulently collected benefits forfeiting future income tax refunds and/or permanent loss of eligibility for unemployment compensation. Commission of unemployment benefit fraud may also be prosecuted by the U.S. Department of Justice in federal courts under 18 U.S.C § 1341 or other appropriate federal statutes.

Victims Of Identity Theft

If you receive mail or a Form 1099G from the EDD, but you did not file a claim for benefits and you think someone else filed a claim under your name, address, or Social Security number, file a fraud report:

  • Benefit Fraud Visit Ask EDD and select the Report Fraud category.
  • Form 1099G Visit Ask EDD and select the Form 1099G category or call 1-866-401-2849, Monday through Friday, from 8 a.m. to 5 p.m., except on .

If we find you were a victim of fraud, we will remove the claim from your Social Security number and send you an updated 1099G, if needed. Review IRS tax guidance on benefit identity theft.

For more information about protecting yourself from identity theft, review the California Attorney Generals Identity Theft Information Sheets and .

Read Also: Do You Pay Income Tax On Unemployment

Office Of Special Investigations

Employment Security Department’s Office of Special Investigations is committed to preserving the integrity of the Unemployment Insurance program. Our office conducts many types of audits throughout the year on unemployment claims to ensure the accuracy of benefit payments made. Individuals found to have committed fraud are assessed penalties , are required to repay the amount identified as overpaid , and are subject to possible state or federal criminal prosecution.

We are very interested in the information you provide to us about fraud. However, we cannot provide information to you about the action we take on any allegation reported to our office unless you are an individual defined in RCW 50.13 and WAC 192-15.

State regulations prohibit the disclosure of information contained in the administration of the Unemployment Insurance Program. There will be no further communication from our office unless one of our investigators contacts you.

Identity Theft And Unemployment Benefits

Unemployment Insurance Fraud Charges In Arizona
  • Tax Exempt Bonds
  • States have experienced a surge in fraudulent unemployment claims filed by organized crime rings using stolen identities. Criminals are using these stolen identities to fraudulently collect benefits across multiple states.

    Because unemployment benefits are taxable income, states issue Form 1099-G, Certain Government Payments, to recipients and to the IRS to report the amount of taxable compensation received and any withholding. Box 1 on the form shows “Unemployment Compensation.” You should report fraud to the issuing state agency and request a corrected Form 1099-G.

    For details on how to report fraud to state workforce agencies, how to obtain a corrected Form 1099-G, a list of state contacts and other steps you should take if you are a victim, see the U.S. Department of Labors DOL.gov/fraud page. Please follow Department of Labor guidance on reporting fraud and protecting yourself from additional scams.

    Recommended Reading: File Weekly Claim Washington

    Irs Information For Employers

    Employers are often the first line of defense against unemployment fraud. Employers should:

    • Respond quickly to state notices that its employees have filed for unemployment claims, especially if the names on the notices are not employees
    • Be alert to misuse of the IRS-issued Employer Identification Number that fraudsters may use to file jobless claims
    • File a Form 14039-B, Business Identity Theft Affidavit, if the companys EIN is being used to generate fraudulent unemployment benefit claims.
    • Write to the IRS to close out the business tax account if the company is going out of business this will help curtail the misuse of dormant EINs.

    You Didnt Have Fraudulent Intent

    Before the prosecutor can prove that you are guilty of violating any California fraud law, he/she must first prove that you had fraudulent intent. If he/she cant prove that you acted with the specific intent to defraud, the judge will instruct the jury to find you not guilty of the charges.

    As Santa Ana criminal defense attorney Zachary McCready11 explains, This means that if you

    • believe you submitted a legitimate claim,
    • accidentally provided the wrong information , or
    • didnt realize that you needed to report freelance income to the EDD,

    then you didnt intentionally act with fraudulent intent and you shouldnt be held liable for violating Californias unemployment benefits fraud.

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    Reporting Fraud For A Monetary Reward

  • 1Check if you qualify for an award. Sometimes, the IRS rewards whistleblowers where their information results in the collection of substantial taxes, penalties, and interest. For example, you might qualify for an award in one of the following situations:XTrustworthy SourceInternal Revenue ServiceU.S. government agency in charge of managing the Federal Tax CodeGo to source
  • If the amount in dispute exceeds $2 million, and a few other conditions are satisfied, then you may get 15-30% of the amount the IRS collects. Furthermore, if the case involves an individual, their income must exceed $200,000.
  • The IRS also has discretion to give awards in other cases. The maximum amount of the award is 15% of the amount collected, up to $10 million.
  • 2Confirm your information is solid. The IRS wont rely on your speculation that someone has broken the law. Instead, it wants solid leads.XTrustworthy SourceInternal Revenue ServiceU.S. government agency in charge of managing the Federal Tax CodeGo to source Analyze what documented information you have that someone is a tax cheat.
  • Supporting evidence can include contracts, emails, bank records, ledger sheets, receipts, and books or records.XTrustworthy SourceInternal Revenue ServiceU.S. government agency in charge of managing the Federal Tax CodeGo to source
  • name of the taxpayer you are reporting, including any aliases
  • last four digits of their Social Security Number or Employer Identification Number
  • taxpayers address
  • alleged violation
  • Prosecution For Ei Fraud

    4 ways people get nailed for “unemployment (EDD) fraud”

    EI fraud is a serious offence that can result in prosecution. All parties involved can be prosecutedincluding EI claimants, employers, and third parties. Prosecutions take place under either the Employment Insurance Act or the Criminal Code of Canada, as determined by Employment and Social Development Canada.

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    What To Expect After You Have Reported Fraud

    We will help you through this difficult time.

    You will receive:

  • An automatic reply when you submit the Fraud reporting form.
  • An email from us with details about what to do next if you cannot access your account or apply for benefits.
  • You do not owe us any money as a result of the fraudulent claim You might have received a letter from us stating that you must repay benefits that we paid on the fraudulent claim in your name. You can ignore that letter! Our computer system automatically generates the letter when we deny an unemployment application. Were sorry for the anxiety it may have caused.

    Be Sure To Report Your Correct Income On Your Taxes

    When you file your taxes, dont wait for a new 1099-G or updated information file them using your correct income according to your records. Tips from the IRS fraud department and DOL on that are:

    • The processing of your tax return should not be delayed while your report of unemployment identity theft is under investigation.
    • If you have not filed your taxes yet, do not report the incorrect 1099-G income on your tax return.
    • The American Rescue Plan of 2021 provides for a one-time exemption of $10,200 per person in unemployment benefits to individuals and couples who earned $150,000 or less last year. If you have already filed your taxes, do not file an amended return. The IRS will issue additional guidance.
    • There is no requirement to file a Form 14039, Identity Theft Affidavit. A Form 14039 should be filed only if the taxpayers e-filed tax return is rejected because a duplicate return with their Social Security number is already on file or if the IRS instructs them to file a Form 14039.
    • If you have already filed your taxes, do not file an amended return. The IRS will issue additional guidance regarding your next steps. Refer to the Identity Theft and Unemployment Benefits page on IRS.gov for updates and additional tax filing information.

    Recommended Reading: Washington State Unemployment Insurance

    What Else Can I Do

  • Monitor your credit report. Now through April 2021, individuals can request a copy of their credit reports from each of the credit reporting bureaus once per week. These reports show all of your known credit card accounts, loans, employers, addresses, and other information. Accounts linked to your name and information will show up on this report even if you did not open the account. Reviewing these reports will let you know if the identity theft is limited to UIB Fraud or if there are other fraudulent accounts in your name. You can request a copy of your credit report using annualcreditreport.com.
  • Contact other fraudulent accounts. If there are other fraudulent accounts in your name, it is important to contact those companies to report the fraud and close the accounts. To close accounts, companies usually need identifying information to find the account and verify the fraud. To be safe, research the company to find the contact information and contact them yourself. It is very unlikely that a company will contact you regarding a fraudulent account, unless you have contacted them first. It can be very uncomfortable to provide identifying information, especially when you suspect there is already fraud, so taking control by confirming the companys contact information can ease some of the discomfort. It is also important to note who you talk to and when you talk to them.
  • If you have been a victim of UIB Identity Fraud you can contact NYSDOL and ask that they review your 1099-G.
  • Reporting Suspected Tax Fraud

    How do you know if you
  • 1Gather evidence of the fraud. The more evidence you can share with the IRS, the better. Look for anything that supports your claims. For example, consider the following:
  • If you have documents that show fraud, keep a copy of them. For example, someone might not report income from a bank account. If you have a copy of the bank statement, hold onto it.
  • Write down your own memories or observations. You are a witness to any fraud. Try to be as detailed as possible.
  • Collect the names of witnesses. Other people might have first-hand knowledge of the fraud, and you can give the IRS their names and contact information.
  • Avoid breaking the law.XResearch source For example, you shouldnt open someones mail, log onto their computer, or steal files. If you dont have documents in your possession, you can tell the IRS where they can find them.
  • 2Identify the correct form to use. You will report suspected fraud to the IRS by filling out a form. You can download these forms from the IRS website or order by calling 1-800-829-0433. You need to use the right form, which will depend on the violation you are reporting:XTrustworthy SourceInternal Revenue ServiceU.S. government agency in charge of managing the Federal Tax CodeGo to source
  • Form 3949-A. Use this form to report a business or individual of violating the tax laws. Common examples include failure to pay, kickbacks, false deductions or exemptions, not reporting income, and altering or falsifying tax documents.
  • information about yourself
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    Restitution In Lieu Of Criminal Charges

    Depending on the circumstances of your offense, a skilled California criminal defense attorney could arrange for you to pay restitution to the California EDD in exchange for the Departments agreeing not to file criminal charges.

    If the Department agrees and you make timely payments you will not face criminal charges. However, if you default on any of your payments, the EDD may institute criminal proceedings at any time.20

    You May Be A Victim Of Unemployment Identity Theft If You Received:

    • Mail from a government agency about an unemployment claim or payment and you did not recently file for unemployment benefits. This includes unexpected payments or debit cards and could be from any state.
    • An IRS Form 1099-G reflecting unemployment benefits you weren’t expecting. Box 1 on this form may show unemployment benefits you did not receive or an amount that exceeds your records for the unemployment benefits you did receive. The form itself may be from a state in which you did not file for benefits.
    • While you are still employed, a notice from your employer indicating that your employer received a request for information about an unemployment claim in your name.

    Also Check: How Do I Get My Tax Papers From Unemployment

    Reporting Ui Fraud And Identity Theft

    The best way to report unemployment fraud or possible imposter fraud against your employee is to raise an issue in your online account. Select the reason Suspected fraudulent activity as the reason for raising an issue. We will review the account filed in your employees name and take immediate steps to resolve the issue.

    If you want to report possible fraudulent activity involving a person who is not your employee, you can report that to us using our online fraud form.

    How To Report Fraud

    Someone Committed Unemployment Fraud in Your Name? – Ep. 7.240

    The best way to report fraud to us is by visiting Ask EDD and selecting the Report Fraud category to complete our Fraud Reporting Form. You can also call the EDD Fraud Hotline at 1-800-229-6297 or fax 1-866-340-5484.

    When reporting fraud:

    • Provide all relevant information about the issue. Your report will be anonymous unless you include your name and phone number.
    • Send any fraudulent documents or mail to EDD PO Box 826880, MIC 43, Sacramento, CA 94280-0225. You can also write Return to Sender on the envelope and provide it to your mail carrier.
    • Write Return to sender on the envelope of any mail you receive that does not pertain to you and provide it to your mail carrier.

    If you need to provide more information after reporting fraud, contact us again. Include the reference number provided when you first reported the issue.

    Note: To ensure the confidentiality and integrity of any investigation, the EDD does not provide status updates unless court-ordered or required by law.

    If you are a victim of identity theft, file a complaint with the Federal Trade Commission or call 1-877-ID-THEFT .

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    Get A Copy Of Your Credit Report

    The next step is to check your credit report to look for any suspicious or unauthorized activity. You should contact each of the three big credit reporting agencies . You can order a free copy online . You will need to verify your identity when calling, so have your name, social security number, date of birth, and other details ready. Ask to have a fraud alert added to your credit file.

    If You Are A Victim Of Unemployment Identity Theft Here Are The Things You Should Do

    First!

    Contact the unemployment agency in your state responsible for your unemployment claims and fill out their fraud or identify theft paperwork. Most states now have online options in addition to mail or fax. See the list below for each states Unemployment Fraud page and steps to prevent and report fraud.

    Then.

    Get your credit report and place a fraud alert with one of the credit bureaus you only need to contact one. Here are the links for their fraud pages ExperianTransUnionEquifax

    Free credit reports are available from the Annual Credit Report Website or by calling 1-877-322-8228. Reports can be obtained at Experian, TransUnion, and Equifax.

    If you receive confirmation that a payment has been made in your name, but you have not received it, you will need to report it to the IRS by completing Form 14039, instructions here.

    States are attempting to contain the fraud and working with federal agencies, including the Secret Service and the FBI. As States and agencies work to uncover and prevent fraud, individuals are seeing a slowdown in claim approvals. At this time, the most proactive thing an individual making a first filing can do it to provide complete information to their respective state unemployment agency and respond promptly to any requests received from them. Nearly all states have a dedicated fraud reporting page and telephone number .

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    Sign Up For The Irs Identity Protection Pin Program

    Anyone who is a victim of identity theft should participate in the IRS PIN program to prevent anyone from filing tax returns on their behalf. Income tax fraud is another very serious issue right now. The PIN program assigns you a six-digit pin, and no one can file in your name without it. You can sign up for a tax fraud alert here Get an IP PIN.

    How To Report Unemployment Benefits Fraud

    Unemployment Fraud and COVID

    The Department of Unemployment Assistance’s top priority is to protect unemployment claimants and make sure money disbursed through the system is going to valid unemployment claims.

    Upon review of your Fraud Reporting Form submission, DUAs Program Integrity team will make note of the submission on the claim filed in your name and lock the claim, which will cease activity on that claim. In addition, this information will be provided to law enforcement as part of their investigation of the national unemployment fraud scheme.

    The DUA Program Integrity team will process the reported fraud to ensure that if any payments were made, they are not recognized as income to you and are not reported to the IRS on Form 1099-G at the end of the calendar year for tax purposes. If you have already received a 1099-G related to this fraudulent claim, we will review your request and send you a corrected Form 1099-G. In addition, the fraudulent claim will not impact your ability to collect unemployment should you need to in the future and no charges will be assessed to your employer .

    If you are an employer who wishes to report fraud, please email .

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