Identity theft can cost you during tax season: It’s ‘a terrible reverse lottery,’ one victim says

Warris Bokhari received an unexpected tax form in early February, just as the 2026 tax season was ramping up.

Uber Technologies, the ride-hailing company, mailed him a Form 1099-K listing about $2,317 in gross income earned through dozens of transactions in November and December, according to a tax form reviewed by CNBC.

But Bokhari, a 46-year-old Los Angeles resident, has never driven for Uber, nor been a courier, merchant or contractor for the company, he said.

He spent weeks trying to track down answers. Uber ultimately confirmed to Bokhari that, after an investigation, it had “found signs of identity theft,” according to a message from Uber support reviewed by CNBC.

Someone else had used Bokhari’s personal information to drive for Uber and earn income — and leave the real Bokhari, in the eyes of the Internal Revenue Service, responsible for taxes on that “phantom income,” he said.

It’s like “a terrible reverse lottery,” said Bokhari, who is the CEO of health care technology firm Claimable. “Your identity can be used by someone else for their gains, and you’re left with bills and debts that you try to undo.”

This issue is a growing problem in the U.S. About 31,450 people reported employment or wage-related identity theft to the Federal Trade Commission through the first three quarters of 2025 — a 61% rise from the same time period in 2021, according to federal data. The FTC doesn’t break out data between employment and wage-related identity scams.

“Mysterious 1099s” aren’t a new issue, but they have become “slightly more common” in recent years, especially within the gig economy, according to Eva Velasquez, CEO of the Identity Theft Resource Center, a nonprofit that provides free help to identity theft victims.

Identity theft tied to employment is generally more common within the gig economy, Velasquez said. With many roles performed remotely or through apps, companies may be interacting with these contractors less frequently, she said.

“These 1099s that come out of nowhere can be so destabilizing for people because it’s such a quagmire for them to report and recover from,” Velasquez said.

In some cases, victims must contact the IRS, their state tax department and the employer that issued the 1099 to resolve the issue, she said.

For federal taxes, you can check the wage and income transcript from your IRS online account to make sure the agency no longer has the incorrect 1099, according to Jeffrey Thompson, a Los Angeles-based enrolled agent, which is a tax license to practice before the IRS.

The IRS recommends getting an identity protection PIN, or IP PIN, a new six-digit number generated each year to block others from filing a fraudulent tax return using your Social Security number or individual taxpayer identification number.

The agency also suggests placing a free one-year fraud alert on one’s credit report with the three big credit reporting agencies — Equifax, Experian and TransUnion — and reporting the identity theft to the Federal Trade Commission.

Resolving tax-related identity theft issues can be “time-consuming,” said Thompson, who also serves on the board of the National Association of Enrolled Agents.

During fiscal year 2025, the Taxpayer Advocate Service, or TAS, received 10,897 identity theft cases, compared to 13,649 during the previous year, Erin Collins, the national taxpayer advocate, wrote in her annual report to Congress. While the number has declined, it remains one of the top four reasons that filers seek TAS assistance, she wrote.

TAS is an independent organization within the IRS.

The IRS is taking more time to resolve those identity theft cases, too: About 21 months during the 2025 fiscal year, up from 19 months the prior year, the report said.

“Resolution times for [Identity Theft Victim Assistance] cases remain unacceptably long — nearly two years on average — leaving affected taxpayers without refunds to which they are entitled and prolonging financial hardships,” Collins wrote.

Individuals who think they received a 1099 tax form in error or that their personal information was misused should contact Uber directly so it can investigate and take action, the spokesperson said. Uber created a dedicated help page for those who’ve received erroneous 1099s.

It takes “constant vigilance” to defend against fraudsters who constantly seek ways to exploit apps for personal gain, Uber wrote in October on a website outlining its identity theft protections.