Sagert's wife, Janet, reached out to me by e-mail on Feb. 4 to tell me about their runaround and the SSA-1099 that they received in mid-January.
"It's $2,095 that they are saying we need to pay tax on," Janet wrote in her e-mail.
The couple had made repeated calls and visits to the Social Security office. No one could give them a clear answer on how to fix the 1099 mix-up. Their tax preparer at one point suggested paying the tax and hoping it would get straightened out and a refund would be issued later.
"I feel like paying the tax will make us look like we're admitting we got the money when we didn't," Janet wrote.
Sagert has worked for more than 40 years for AT&T and now works full-time as the union president. His goal was to collect Social Security benefits at age 65.
He received a letter in April stating that beginning May 1 he'd receive $2,095 a month.
He knew he never applied for benefits so he called the Social Security hotline. After about the fourth call, he said he realized he had to go to an office to get some action.
At one point, he said, he understood that the benefits were going to a post office box in Utah.
"I've never been to Utah. I've worked for 40 years for the same company."
Martinez, at the Social Security regional office in Chicago, declined to comment on Sagert's situation, noting that privacy laws prevent the agency from disclosing information on a specific person's record. But in an e-mail sent Thursday evening, he said the agency looked into the situation and resolved it with Sagert.
After I called Sagert for further clarification, he told me Friday he had not received any indication the situation was resolved. But by Tuesday morning, I received a call from his wife who was surprised to report that a revised 1099 had hit their mailbox.
"I think it's because you called. I can't believe we got this," she said.
The letter noted that an incorrect Form SSA-1099 was issued for 2017 because the form was automatically generated. But the benefits reflected on that original form "came from a claim filed on your record by a person other than yourself."
Tax season can only make things tougher for ID theft victims, as it's not obvious what to do.
Depending on your filing status and income, up to 85 percent of Social Security benefits can be taxed at ordinary income tax rates. In addition, taxable Social Security benefits can trigger higher Medicare premiums, which are based on income.
The Social Security website at www.ssa.gov doesn't give clear tax help to consumers who have had their data stolen.
The site does give information for those who need to replace a legitimate SSA-1099. You can use your online Social Security account to get a replacement SSA-1099 or call 800-772-1213 Monday through Friday from 7 a.m. to 7 p.m.
According to Martinez, you'd contact those same numbers or go into a local office if you spot fraud or receive an SSA-1099 that reports benefits that were given to someone else after ID fraud.
Gil Charney, director of tax law and policy analysis for The Tax Institute at H&R Block, said the Social Security Administration reported the phantom income to the Internal Revenue Service on the Form SSA-1099, so it cannot be ignored when filing a tax return.
Shambo requested that Social Security re-issue an SSA-1099 in late January to indicate all zeros for no income to him. He also said that the revised 1099 should show that it's a "Corrected" 1099. He had not yet received that revised 1099 last week. He was told it would take 30 days and expected to receive it by Feb. 25.
Martinez told me by e-mail that the agency's Program Service Centers can correct the 1099 to show that $0.00 was paid and then a corrected 1099 would be mailed to the individual. To ensure the IRS has accurate information, a copy of the corrected 1099 would be sent to the IRS, he said.
Working as early as possible -- and being as persistent as possible -- seems to be the only option for ID theft victims.
Some could need to file a Form 4868 for filing for an automatic extension if the proper paper work doesn't arrive in time. If you file a six-month extension, you'd need to make sure you pay what's required by the April 17 deadline to avoid any interest and penalties. The taxpayer would pay the higher of the amount of tax calculated for the 2017 tax or 100 percent of the tax for the prior year with a federal tax extension.
Cari Weston, director of tax practice and ethics for the American Institute of CPAs, said the IRS does not want taxpayers to include fraudulently reported income on their returns.
"But the process to get the form corrected may take months to resolve," Weston warned.
About The Writer
Susan Tompor is the personal finance columnist for the Detroit Free Press. She can be reached at email@example.com.
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