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No, you don't need to pay taxes on money you didn't receive in connection to identity theft

If you were one of the more than 400,000 Ohioans who reported unemployment identity theft, here’s what you need to know if you get a 1099 in the mail.

COLUMBUS, Ohio — According to Ohio Department of Job and Family Services, 410,000 individuals reported their identity was stolen since the beginning of the pandemic. One of those people asked our verify team -- what does this mean for his taxes?

THE QUESTION:

Darrell Holmes: “We received a 1099 from the Department Job and Family Services for $5,000 of PUA funds we neither applied for or received. They already had a statement from us that this was fraud. According to ODJFS there are thousands of cases like ours. Do we have to pay for money we didn't receive?"

THE SOURCES:

  • Ohio Department of Job and Family Services
  • IRS
  • E. Martin Davidoff,  Partner-in-Charge of the National Tax Controversy Practice of Prager Metis CPAs, a member of Prager Metis International Group.

THE ANSWER:

No, you do not have to pay for money you didn't receive. 

Here's what we found:

"You never have to report income that you don't receive,” said Davidoff. "I would say that the answer is clearly no. And in fact, the IRS has a specific section on their website for identity theft and unemployment benefits, they actually tell you what to do."

And according to the IRS-- "When you file your income taxes, ONLY include income you received, even if you have not yet received a corrected 1099-G from the state."

Holmes already did this. But if you're in the same situation, ODJFS says you should go to unemployment.ohio.gov and click the "Report Identity Theft" button. The state is offering free credit monitoring to victims of unemployment related identify theft.

And Davidoff said that’s an important thing to do to further protect your identity.

"Once you're subject to identity theft on your unemployment benefits, you may be subject to identity theft on your taxes,” he said.

The IRS can issue you what it calls an identity protection IP PIN -- that you'll be asked to provide when you file your taxes electronically.

So when it comes to PUA fraud and your taxes we can verify, no, you do not have to pay for money you didn't receive.

Have something you’d like us to verify? Send us an email to verify@10TV.com.

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