Ohio AG seeks protection for victims of unemployment fraud from Congress

Credit: Cory Frolik

Credit: Cory Frolik

Ohio Attorney General Dave Yost is asking Congress to suspend tax collection and half fees and interests due on unemployment claims as the state investigates claims of widespread fraud.

About 1.7 million 1099-G forms will be sent to Ohioans this month who are on record of receiving unemployment benefits. However, believes a significant number of forms will be sent to people who never filed or received unemployment benefits.

“Construction workers, daycare providers, service industry workers – the backbone of this state – have worked hard throughout the pandemic and now the government is going to ask them to pay taxes on money they didn’t receive – it’s just not right.” he said.

With other states also reporting issues with fraudulent claims, Yost wrote a letter to Congress asking for safe harbor provisions for Ohioans.

“Ohioans have endured a lot over the last year,” he wrote. “Receiving a tax document for income that was never received will be another significant hardship for many.”

Yost suggested the following to protect fraud victims:

  • Exclude the amount from the income for the taxpayer in the given year until a final determination is made by the state unemployment compensation administrator that the amount is valid.
  • Once an amount is determined to be valid, the IRS shall apply the amount to the tax year in which it was determined to be valid without any penalties or interest.
  • If an amount certified to the IRS is determined to be invalid, the unemployment compensation administrator shall indicate to the IRS that the 1099-G was issued in error, and assist the taxpayer with any correction the taxpayer is required to make to modify their reported income to the IRS.

Gov. Mike DeWine and Lt. Gov. Jon Husted said earlier this week that they both had false claims filed in their names.

“A few weeks ago, Fran and I got some correspondence from the state of Ohio that we had filed an unemployment claim,” DeWine said. “So, we know that this is widespread. We weren’t exactly sure what anyone was trying to accomplish there with us. But we know there has been a lot of these.”

It’s not clear how many victims there are at this time.

Anyone who receives a 1099-G form but did not file for unemployment last year should file a report with the Ohio Department of Job and Family Service here.

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