WGNO

Audit reveals approximately $2.1M in over-reported unemployment benefits

BATON ROUGE, La. (BRPROUD) — Nearly 2,000 Louisianans could be getting a check after their unemployment benefits were filed incorrectly.

A new audit shows nearly $2 million were over-reported to the IRS by the Louisiana Workforce Commission in 2020.

“Any wages that you earn at a job or in this case any benefits that you receive for unemployment, the individual is liable to pay taxes on those benefits,” said Louisiana Legislative Audit Data Analytics Manager Chris Magee. “And, so, if the IRS receives a dollar amount that’s higher than any individuals actually received, then that person could end up paying more in taxes than they really should have paid.”

Magee said that the Louisiana Workforce was aware of the problem but temporarily made the problem worse when trying to fix it.

“The issue is that the coding in the system didn’t fix these, it actually made other ones incorrect as well,” Magee explained. “And an additional 10,000 people had their benefits overstated to the tune of more than $8 million.”

Those were caught in time, and the department did correctly file the vast majority of unemployment benefits, 99.7 percent to be exact.

“But because of their coding issues in their system, they are now having to manually review these 1099 to figure out which ones are correct and which ones are not correct,” Magee said.

A process Magee says could take up to three years to complete. People whose unemployment benefits were submitted incorrectly could be getting a check from the IRS, but they might not know to expect it.

“Unless the individuals have reached out to the Louisiana Workforce Commission, they may not be aware of this issue,” Magee warned.

The Louisiana Workforce Commission responded in a statement:

“It’s important to note that the report reflects that LWC completed the processing and filing of the IRS Form 1099-G filings with 99.7% accuracy. As with all processes, however, the LWC strives for 100% accuracy and will continue to do so. We have already started identifying the incorrect 1099-G forms and will submit the necessary corrections to the Internal Revenue Service (IRS) as soon as possible. Individual taxpayers can also make adjustments to an incorrect 1099-G at the time of filing their tax returns including a statement explaining the difference in the actual 1099-G reported data and the amount submitted via their tax return. This agency is committed to ensuring that our UI system runs efficiently for the benefit of those individuals that depend on it, and will remain focused on improving the system for the State of Louisiana as a whole.”

Sec. Ava Cates, Louisiana Workforce Commission.