Reports of unemployment fraud increase as states mail out tax forms

States mailing out forms for the approaching tax-filing season are seeing a significant number of reports of unemployment fraud, according to a report by The Associated Press.

States were flooded with unemployment filings during the coronavirus pandemic as businesses shuttered for extensive periods of time. This ended up overwhelming unemployment offices, which saw a surge in claims as the unemployment rate raced up from historic lows.

People who receive unemployment still must pay taxes and are now receiving their 1099-G forms this tax season.

But the AP noted that many people who never filed for unemployment also are receiving these tax forms. 

A report from the Department of Labor’s Office of Inspector General shows that $36 billion in improper unemployment payments were made, with much of that being due to fraud, by November of last year. 

Even lawmakers have seen fraudulent claims made in their names, according to the AP, including Sen. Dianne Feinstein (D-Calif.), Ohio Gov. Mike DeWine (R) and Ohio Lt. Gov. Jon Husted (R). 

The IRS is recommending that people who incorrectly receive 1099-G forms just file their taxes without it. 

IRS spokesman Thomas Betti told The Associated Press that Ohio has already seen 66,000 reports of fraud in the past two weeks. California had a backlog of more than 77,000 claims by November of last year. 

California updated its website and hired 300 new employees to help those who have mistakenly received 1099-G forms.