Class Action Suit Claims Uber Submitted Fraudulent Returns to IRS, Creating Tax Headaches

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Uber faces a proposed class action lawsuit over its alleged practice of submitting fraudulent returns to the Internal Revenue Service (IRS) and falsely reporting that individuals who had never worked for Uber had earned income as independent contractors for the rideshare giant.

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The 14-page lawsuit against Uber Technologies states that the plaintiff, a Kern County, California resident, unexpectedly received from Uber in February 2020 a form 1099-MISC, which indicated that the company had paid him roughly $6,000 in nonemployment compensation. According to the suit, the plaintiff “had never done any work whatsoever” for Uber and had never been paid any money from the company.

From there, the plaintiff immediately filed an identity theft report with the Federal Trade Commission (FTC) and reached out to Uber, which “gave [the plaintiff] the run-around,” leaving the man with no explanation for the 1099 form he received, the filing relays.

In August 2021, the plaintiff received a notice from the IRS indicating that the agency believed he owed around $22,000 in unpaid taxes, the lawsuit states. The IRS notice, which allegedly contained a breakdown of earned income reported to the agency on behalf of the plaintiff, indicated that Uber had reported on a form 1099-K that it had paid the plaintiff more than $53,000 in 2019, the case says.

The suit reiterates that the plaintiff “had never worked for [Uber], provided Defendant with any goods or services, or received any payments from Defendant whatsoever,” and claims the man spent approximately the next year dealing with the IRS to resolve the problem.

The proposed class action accuses Uber of having allowed an unknown person to work for it as a rideshare or delivery driver using the plaintiff’s personal information without adequately verifying that the person was who they said they were.

“On information and belief, Defendant routinely allows individuals to work for it as a rideshare or delivery driver using the personal information of other individuals,” the case charges.

As a result of Uber’s alleged failure to properly vet the identities of its drivers, individuals with no affiliation with the company are “stuck with an unexpected income tax bill for money they never received,” the lawsuit says.

The filing adds that the plaintiff received in January of this year a notice from the California Franchise Tax Board indicating that it believed the man owed around $3,600 in back taxes for income he supposedly received from Uber in 2019.

“Plaintiff is now dealing with the Franchise Tax Board, as he did with the IRS, to correct this issue,” the case reads.

The Uber tax lawsuit looks to cover all individuals in the United States for whom, within the last six years, Uber reported earned income to the IRS but who did not receive any money from the defendant for the tax year in which the company reported such income to the agency.

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