May 24, 2024

Keeping Media and Government Accountable.

Unemployment fraud victims in Kansas taxed on money they didn’t get

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Imagine being the victim of unemployment fraud and having the state tax department charge you income tax on money the state sent to someone who stole your identity.  It’s not a parody from the Babylon Bee — it’s happening to some Kansas taxpayers, and the bureaucracy doesn’t seem to care.

The Topeka Capital-Journal reports that a hearing by the Unemployment Compensation Modernization Improvement Council featured Topeka accountant Greg Hughes with five clients in a double-bind; victims of cybercrime and of the bureaucracy in the state Departments of Labor, Revenue, and Administration. Hughes told Council members of his and his clients’ frustration: 

“The problem is you just can’t get anywhere with anybody, it’s just bureaucracy gone amok.”

One of Hughes’ clients is an 80-year-old woman who sent multiple faxes to the Kansas Department of Labor, saying someone was trying to get unemployment benefits in her name.  But KDOL paid the fraudulent claim, and now the Kansas Department of Revenue has her in a debt setoff program and has taken money from her for two years for unpaid taxes.

The Sentinel reached out to the Departments of Labor and Revenue to ask if they are coordinating with each other to stop people from being taxed on claims filed in their name and make their victims whole.  But predictably, neither agency responded.

For Rep. Sean Tarwater, Sr. of Johnson County, chairman of the council, the issue is accountability and transparency:

“This is just one more example of this administration’s incompetence.  More than half the states have our same system, yet they were able to apply solutions early enough to avoid the massive fraud, protect their citizens’ identity, and get them paid timely.

“The fact that we are now punishing the innocent victims is absurd. These are the very people that called in and told us their identity was stolen.   Many had to wait months to receive benefits they so desperately needed, and now we are stealing their IRS and State tax refunds that they also so desperately need.

“It is clear this governor does not care.  Four secretaries and five deputy secretaries later, she still can’t hire competent people.

“This madness has to end.”

A recently-released audit report indicated that unemployment fraud cost the State of Kansas $466 million between March 2020 and March 2022, and a handful of Kansans are being assessed tax bills or having their state tax refunds intercepted, all for unemployment benefits they did not receive.

In 2019, Kansas ranked 39th in the nation in identity theft per capita. Largely due to the scandal-plagued unemployment compensation program in the Department of Labor, the state surged to the worst in the nation in 2020, dropping to the second worst in 2021.

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