Latest fraud scheme involves erroneous Forms 1099-G

If your finance team ever handles 1099-G forms, it should be wary of a new scheme involving that specific information return.

A press release from the U.S. Department of Justice’s National Unemployment Insurance Fraud Task Force (NUIFTF) explained that it’s “investigating numerous fraud schemes” regarding 1099-Gs and unemployment insurance programs.

Essentially, scammers are filing fraudulent claims for unemployment insurance benefits. That, in turn, is leading to the distribution of erroneous Forms 1099-G. Some people may get a form indicating they’ve collected unemployment insurance benefits when they haven’t done so. Other people may not get a 1099-G, then later find out their identity was used to file for these benefits.

Staying on guard

Typically, Form 1099-G, Certain Government Payments, is for workers who receive payments from a federal, state or local government. It reports things like unemployment compensation and state and local income tax refunds.

If you issue 1099-Gs, you may want to reach out to your recipients to make them aware of the scheme and the possibility of erroneous forms.

And for all companies, including those that don’t issue 1099-Gs, this scheme should still serve as a reminder of how creative fraudsters are getting with identity theft and unemployment insurance fraud. Remind your team that if scammers are exploiting 1099-Gs, there’s a chance they could devise schemes involving other 1099s next.

Lastly, to help everyone stay on guard, the NUIFTF joined forces with federal agencies to provide relevant resources:

• IRS, Identity Theft and Unemployment Benefits
• Department of Labor, Report Unemployment Insurance Fraud
• Federal Trade Commission, Has someone misused your personal information to claim unemployment insurance benefits?

Be sure to pass these resources along to your team and any 1099-G recipients, too. That way, you know everyone working with your company’s informed on this scam and similar types of identity theft.