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People are getting taxed for gig work they've never done

Apr 6, 2024, 16:51 IST
Business Insider
Some people are getting tax forms suggesting they worked for apps like DoorDash even when they didn't.Alexi Rosenfeld / Contributor/Getty Images
  • People are getting surprise tax forms from DoorDash and Uber, but have never worked there.
  • 1099 forms and IRS letters about back taxes can be signs someone used your identity to do gig work.
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Last December, Brandon Emerson noticed a letter in the mail from the IRS. It claimed that his wife, Kelly, hadn't paid about $10,000 in taxes on income from her work on DoorDash.

There was just one problem: Kelly has never worked for DoorDash — or any gig delivery service.

As the letter and their subsequent investigations showed, someone had used her Social Security number to earn about $21,000 through DoorDash over the course of 2022.

"I know my wife didn't work for DoorDash," Brandon told Business Insider. "She's been a stay-at-home mom for seven to eight years." The couple and their children live in Rochester, New York.

Stories like the Emersons' are surprisingly common. People who have never once delivered for a service like DoorDash suddenly find out that someone else used their name, address, Social Security number, and other details to do just that.

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A DoorDash spokesperson did not comment specifically on the Emersons' case but said that the company requires prospective delivery workers to provide a valid government ID and verifies multiple elements of their identity, including the Social Security number they provide when they sign up. The spokesperson also pointed to an announcement last August that it would re-verify the identity of its delivery workers.

"In rare circumstances that an individual believes their identity was fraudulently used to dash, we encourage them to contact DoorDash support immediately," the spokesperson said.

With the IRS tax filing deadline of April 15 coming up, some people are reaching out to the delivery services about taxable income they never made.

On X, formerly known as Twitter, some have posted about Uber sending them 1099 forms — documentation of income that the companies have to send to independent contractors annually so that they can file their taxes.

An Uber spokesperson said the company is "committed to investing in robust anti-fraud systems and detection capabilities to keep up with new and enhanced fraud techniques."

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Anyone who has received a tax form but didn't drive for Uber can reach out to the company's support line, the spokesperson added. Uber even has a webpage in its help section titled: "I do not drive with Uber, but I received a 1099 tax document from Uber."

One non-gigworker got tax forms totaling $66,000 in Doordash income

Faith Gardner, who lives in Richmond, California, received a dozen 1099 tax forms in the mail in early 2022. Between them, they represented $66,000 in income from DoorDash for 2021 that she never earned.

While all showed up at her address, only one used her name. None of them referenced Gardner's actual Social Security number, though all included the last four digits of other people's Social Security numbers.

Over two weeks, Gardner contacted the IRS, the Better Business Bureau, and the Federal Trade Commission, which collects reports of identity theft. She also reached out to DoorDash, but said the company didn't provide any details about what happened or offer to help clear her record with the IRS.

"I was so angry with the experience because it took so much of my time and my money," Gardner told BI.

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The DoorDash spokesperson disputed that the company provided Gardner no help, saying it referred her to "IRS guidance that a taxpayer who has received a Form 1099 from a company they did not work for should not include the income on their tax returns."

The spokesperson also said that both Gardner's and Emerson's experiences "appear to be cases of identity theft from years ago — which are external and unrelated to the DoorDash platform — committed by a sophisticated bad actor."

In both instances, DoorDash "immediately deactivated the related Dasher accounts," the spokesperson said.

Gig delivery companies have been hit by hackers, pointing to one potential source.

The people BI spoke with said they don't know exactly how someone got hold of their personal details. As BI has previously reported, figuring out how someone's identity was stolen tends to be complicated.

But in the last few years, multiple gig delivery services have acknowledged hacks that have stolen the personal information of both delivery workers and customers.

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One 2022 incident gave hackers access to names, delivery addresses, and, in some cases, partial payment information for DoorDash customers.

In February, Walmart said that hackers got access to about 200 driver accounts for its Spark delivery service. The hack gave the attackers access to Social Security numbers and other personal information about the drivers, the retailer said.

Gardner, who had previously used DoorDash as a customer, said she ultimately ignored the 1099s she received. The IRS told her that none of the income would be associated with her since none of the forms used her Social Security number, she told BI.

Still, she said, she now pays about $200 a year for an identity theft prevention and credit monitoring service to make sure no one else uses her information. She's also sworn off food delivery apps. "It made me say that I'm putting my foot down," Gardner said. "I'm never ordering from DoorDash again."

The Emersons took longer — three months — to resolve their case. They filed a fraud report with the IRS, saying that Kelly had never worked for DoorDash and that they weren't liable for paying taxes on the income. In March, they finally got another letter from the agency: The IRS agreed with them, and they didn't have to pay anything.

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But Brandon said the couple worry that something similar might happen again.

"If DoorDash didn't do anything on their end with whoever used her social, they could be continually using that," he said. "I would hope that they fix that."

Do you work for DoorDash, Instacart, Walmart Spark, or another gig delivery service and have a story idea? Reach out to this reporter at abitter@businessinsider.com

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