Hanover Man Is Required by State to Pay $8,000 Tax Bill for Unemployment Benefits He Never Received – CBS Boston
HANOVER (CBS) – The unemployment fraud pandemic has been a major problem nationwide, but a Hanover couple didn’t know they were caught up in the mess until they received their tax form. for benefits they never received or applied for.
Linda Kearns said her husband received a form 1099-G in the mail claiming he owed tax on $22,000 in unemployment benefits. “He has never received a dime of unemployment in his 40-year career,” she said.
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Linda and her husband immediately appealed. The Department of Unemployment Benefits returned a letter stating an investigation was completed and the form was correct. “We pay taxes on that to the IRS at $8,000,” Linda said as she read the letter saying they could dispute that tax payment with the IRS. “Good luck with that,” she said.
Tax accountants agree with that. To dispute that payment, Kearns would have to pay and then file a 1040-X Amendment and attempt to get the money back from the IRS. Hingham tax accountant Tim MacLellan said the IRS is assisted in processing 1040-X forms and they could use that money for a long time. “At least a year,” he said.
We encourage Linda to contact her state senator, who contacted her immediately. Sen. Michael Brady said: “If I received a letter like this, I would probably go into shock or possibly have a heart attack.
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Brady told us he contacted the Department of Unemployment Assistance, and they agreed to send the couple a new form to fix the problem.
What worries Linda most is the fact that her husband’s company sent a letter to the state months ago saying that her husband was still working and that the lawsuit was fraudulent. “I don’t think they even conducted an investigation. They basically washed their hands and now want to take it to the IRS, meaning we have a lot of work to do to get this fixed,” she said.
The State Department of Unemployment Assistance has released the following statement regarding its investigation of fraudulent claims:
Taxpayers don’t have to pay taxes on money they never received. However, once benefits have been paid, the DUA must investigate the matter to confirm the actual recipient. The DUA Program Integrity Team will process reported fraud to ensure that if any payments are made, they are not recognized as income and not reported to the IRS on Form 1099. -G at the end of the calendar year for tax purposes. If a member receives a 1099-G regarding this fraud claim, the DUA will file a corrected Form 1099-G upon notification. Additionally, a fraudulent claim will not affect the person’s ability to collect unemployment in the future, and no fees will be assessed to that person’s employer (if any).
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If the DUA reviews a claim and determines that the 1099-G was properly issued and the member disagrees, the matter must then be resolved by the member directly with the IRS.