IRS issues warning as Bay Area workers receive 1099s from Uber, even though they've never driven a rideshare

SAN CARLOS, Calif. (KGO) -- The IRS is issuing a warning about a new scam that the tax agency has never seen is hitting the Bay Area. Gig workers and other independent contractors are receiving 1099s from companies they've never worked at. If this has happened to you, the IRS warns you need to take action.

Justin Jones of San Carlos supposedly earned $21,000 working three months for Uber.

"A little alarming and unexpected because I don't work for Uber," said Jones.

Aaron Vurek purportedly made $36,000 driving four months for the ride-sharing company.

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"Not if I'm flat on my back," said the Daly City man. At the time of his reported employment, he was on disability receiving chemotherapy for lung cancer.

Yet both received 1099s saying they worked for the company.

"How do I explain to the IRS that I wasn't working? How do I prove it? It's going to be hell," said Vurek.

"It took me a little time to place this and realize it was in my name. I could see certain information on there which sort of pertain to me," said Jones.

The IRS strongly suspects both are victims of identity theft.

Special Agent Arlette Lee is with the tax agency's criminal investigations unit.

"Is it just using it for employment purposes?" asked Lee. "It is much greater that? Is the information being used for other kinds of identity theft?"

It's likely the scammers are doing this because they can't legally get a Social Security card, or maybe trying to avoid paying taxes on their earnings.

Lee says she's never seen a crime like this one.

She's urging victims to file an identity theft affidavit with the IRS.

Contact the Social Security Administration, the Federal Trade Commission and the state Franchise Tax Board.

Even Uber has a form to fill out.

It's, unfortunately, a time-consuming process.

"It's just one more thing I have to deal with while I'm dealing with lung cancer," said Vurek.

Both he and Jones became frustrated trying to contact Uber seeking an explanation.

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"Just really hard to track anyone down. Very hard to find a phone number," said Jones.

Vurek went so far as to visit Uber's downtown San Francisco office hoping to get answers but says he couldn't get past the security guard.

Both contacted 7 On Your Side for help, and we've put them in touch with both Uber and the IRS.

Uber told us "identity theft is an issue that's beyond Uber... Over the last several months we've implemented new processes and technology to prevent fraud."

The IRS suspects there are many more victims and is urging anyone impacted to come forward.

"First of all I'd like them to contact you guys, then sent it to me afterwards," urged Lee.

She believes other companies besides Uber have also likely issued erroneous 1099 forms.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

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