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Letter to Charles Rettig, IRS Commissioner and Rita Saenz, Director of the CA Employment Development Department - In Light of EDD Fraud Failures, Harder Asks IRS for Answers on Tax Bills for Victims

Letter

Date: Jan. 20, 2021
Location: Washington, DC

Dear Commissioner Rettig,
I write today to urge the Internal Revenue Service (IRS) to take proactive measures identifying and
resolving the high number of unemployment identity fraud cases this tax season. There is a concern that
my constituents will be left dealing with tax bills originating from fraudulent claims made in their names.
The fraud that has occurred in California is staggering. Our state's Employment Development Department
(EDD) has potentially distributed upwards of $8 billion in fraudulent claims since this pandemic began.
1
For many affected, the Federal Bureau of Investigation (FBI) has said that they may only learn that they
are victims of identity fraud when they receive an IRS Form 1099-G in the mail.2 As this has been an
ongoing problem and the FBI first raised this concern in July of 2020, I write to inquire a response to the
following questions:
1. What is the IRS doing to proactively address unemployment identity fraud and minimize the
burden on fraud victims?
2. How are you working with unemployment departments, such as California's EDD to resolve tax
bills before they are sent to fraud victims?
The only guidance currently issued by your agency on unemployment benefit fraud is a simple alert
stating that verified fraudulent claims should not be reported on the IRS Form 1099-G.3 This is
insufficient guidance for victims. I urge you to create a streamlined and easy-to-understand process so that none of my constituents are lost disputing a fraudulent tax bill. As you know, this year's tax season is
fast approaching, so I urge quick action. Thank you for your attention to this critical matter and I look
forward to your timely response.


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