Vermont labor commissioner apologizes for tax data bungle

BURLINGTON, Vt. (WCAX) - Vermont Labor Department officials remain on damage control a day after revealing a massive data breach involving tens of thousands of 1099-G unemployment tax forms sent to the wrong people.

Officials Tuesday again apologized for the error and urged all Vermonters who received the wrong forms to send them back, as well as offering credit monitoring to claimants whose personal information was exposed. The department is conducting a review to see where and how the error happened.

Melissa Frary runs a child care service out of her home in South Royalton. She received a 1099-G tax form Monday with her name and address, but when she opened it it had someone else’s total benefit amount. “I was questioning it and then realized there was a different Social Security number on there,” Frary said.

She’s one of some 55,000 Vermonters who received similar tax forms that mistakenly had other peoples’ personal information. Frary says she and her family have been through the wringer with the labor department as her husband’s unemployment claim is in adjudication and they await answers. Now, she worries someone may have her social security number as well. “What if someone out there has my number and wants to use it in a nefarious way?” she said.

To minimize confusion, the state is asking for the return all 80,000 1099-G forms that were sent out, even if the personal information is correct. The state will pay for postage - and then they’ll send a replacement 1099-G.

There’s no word yet on how the bungle happened and what it will cost. Vt. Labor Commissioner Michael Harrington says their main focus is to make things right. “We have an obligation under the law to notify the Attorney General’s office as well as the IRS, but more importantly we have an obligation to notify the impacted individuals,” he said.

Tax experts say it’s unlikely that much of the private information shared would be used for nefarious purposes. “Few, if any people are going to be hurt by it. It’s downright embarrassing. It indicates some significant shortcoming in the Department of Labor’s procedures that such a thing could happen,” said Claude Schwesig, a CPA with Herrick Global in Burlington.

The department is reaching out to everyone whose personal information may have been shared to offer information about how to protect their information and offer to pay for enrollment in Identity protection. They’re also going to double-check the names, addresses, and benefit amounts of everyone to who they send new tax forms.

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