: What gig workers who have been scammed must do to avoid losing even more to taxes

by | Aug 11, 2022 | Stock Market

Gig workers who lose earnings through scams or identity theft need to take action to avoid losing even more money, experts say. While gig-work companies such as Uber Technologies Inc.
DoorDash Inc.
Lyft Inc.
and Instacart sometimes compensate workers for lost earnings that can total in the hundreds or thousands of dollars, many haven’t been able to get their money back, as MarketWatch recently reported. And that could mean “adding insult to injury” come tax time, said Brian Greenberg, director of accounting firm Greenberg & Assoc. in New Jersey.

Greenberg said if a gig worker loses earnings through no fault of their own, “the IRS doesn’t care that he was defrauded” if the agency is not informed. Don’t miss: How scammers target vulnerable gig workers, and why it may never end Nina Olson, executive Director for the Center for Taxpayer Rights in Washington, and a former national taxpayer advocate for the Internal Revenue Service, said it’s important for the affected gig workers to take proactive steps to avoid tax nightmares. Olson acknowledged that “you’re putting more burden on people who have already experienced incredible burden.” But the steps are necessary, according to her, Greenberg and other experts. Here are the tips they shared: Act early: Gig workers should try to act before receiving their 1099 tax forms that show annual income. If they “catch [a loss from a fraud or scam] quickly enough,” they should ask the platform to adjust their payouts on the form before the end of the year, Olson said. If the company agrees, the income shown on the form will be more accurate and the workers’ tax liability will be lowered. Spokespeople for Ub …

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