The IRS is warning taxpayers of an identity theft scam involving fraudulent claims for state unemployment benefits. Identity thieves are reportedly using stolen personal information to file for and receive unemployment benefits. This scam has proliferated during the COVID-19 pandemic as unemployment claims in general have skyrocketed.

In response, the IRS says taxpayers who receive Forms 1099-G, Certain Government Payments, reporting unemployment benefits they did not receive should contact the state unemployment agency and get a corrected form saying they did not receive those benefits (IR-2021-24).

The IRS told taxpayers who are unable to obtain a timely, corrected form that they should still file an accurate income tax return, reporting only the income they received. A corrected Form 1099-G showing zero unemployment benefits when taxpayers have been victims of identity theft will help them avoid being hit with an unexpected federal tax bill…

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