BENNINGTON — The Vermont Department of Labor is scrambling to repair the damage caused by the errant mailing of tax forms with personally identifiable information, including names, addresses and Social Security numbers, to the wrong addresses.
State Labor Commissioner Michael Harrington says some people who received unemployment benefits were sent 1099-G tax forms that had the correct first name and address of the recipient, but information, including tax identification numbers, for someone else.
That’s raised concerns about identify theft among Vermonters, who have been in touch with lawmakers about their concerns.
The Labor Department is now recalling all 1099s it has sent out — about 80,000 out of a total of 180,000 to be mailed this tax season — and is asking those who received forms so far to set them aside for eventual return and replacement.
New, corrected forms will be sent out, and the state will provide self-addressed, stamped envelopes for the return of the errant forms. And the state will contact affected persons to set up anti-identity theft protection programs, Harrington said.
If the name on the envelope address is incorrect, don’t open it, Harrington said Tuesday. If it’s correct, open it in case it’s a benefit check — but if it’s not, set it aside for eventual return, he said.
Harrington said that out of about 80,000 forms sent out so far, about 55,000 were corrupted somewhere in the process. It’s believed that the error took place when the documents were finalized and processed for printing and mailing, he said.
It’s the second major problem for the Department of Labor in the past year. Last spring, an unprecedented volume of unemployment claims caused by the COVID-19 pandemic overwhelmed the department’s antiquated mainframe computer system and its call center, leaving frustrated applicants without unemployment checks or answers.
Asked repeatedly about accountability for the error during the COVID-19 briefing on Tuesday, Harrington said that starts with him — but stressed that the department’s first obligation is notifying impacted residents and getting corrected forms out the door.
“Our investigation of the process will bear out where the failure occurred,” he said.
“I’m not a big fan of pointing fingers,” he added. “At this point we’re all focused on how to notify claimants as quickly as possible.”
Harrington said the problem is not directly connected to the Department of Labor’s outdated unemployment insurance computer system, a mainframe which caused numerous headaches last year when it couldn’t handle heavy claim demand.
However, “all roads lead back to antiquated systems,” Harrington said.
Because the mainframe system can’t house all of the different unemployment insurance programs being provided during the pandemic, that data has to be stored elsewhere, Harrington explained. That means the data has to be transferred manually through a multiple step process, increasing opportunities for human error, he said.
Harrington, a Bennington native, isn’t the only Southern Vermonter tied to the saga. It appeared a Bennington woman was responsible for letting the state know there was a problem on Monday.
Starr Volkmer of Anthony Drive opened her mail Monday morning to find that her name was misspelled on the envelope, the amount listed on the form was incorrect, and the Social Security number listed was not her own.
“I noticed my first name was right but my last name was completely wrong,” Volkmer said, finding that odd because her first name is what usually trips up people.
Then, one of Volkmer’s co-workers at Porta-Brace in Bennington reported their son’s form 1099 had the same kinds of mistakes.
Concerned, Volkmer called state Sen. Brian Campion, D-Bennington. “I knew he would know at least who to get a hold of,” she said.
Campion, who praised Volkmer for providing the heads-up, then texted Harrington about the problem.
‘ALL HANDS ON DECK’
Campion noted that Scott’s Twitter account had published a tweet Tuesday morning about pandas frolicking in the snow at the National Zoo. “He should be tweeting information so people know what they need to do,” Campion said. “This should be all hands on deck.”
Tuesday afternoon, spokesperson Jason Maulucci said Scott is “incredibly frustrated by the error” at the Department of Labor and “completely empathizes with the concern and anger of impacted Vermonters.”
“The state is committed to providing all those impacted with the ability to enroll in identity protection services,” the statement said.
Tuesday morning, during the State Senate Democratic caucus, senators including Campion, Sen. Dick Sears, D-Bennington, and Sen. Ginny Lyons, D-Chittenden, called for an independent or Senate investigation into the mishap.
“This is a serious breach,” Sears said. “I don’t think we’re treating this as serious as it is.”
Sears said he was contacted Monday by a constituent who received someone else’s Social Security number, and is concerned that someone else has theirs.
“There should be an investigation,” Sears said, adding that he’d be willing to grant it subpoena power if necessary. “Whoever is responsible needs to be held accountable. We can’t keep doing this.”
Senate President Pro Tem Becca Balint, D-Windham, said she thinks “some kind of independent investigation would be appropriate.”
Balint said the Senate would continue to pursue information through its Commerce and Economic Development Committee, and that she and House Speaker Jill Krowinski, D-Chittenden 6-3, are being briefed by Scott’s office “on this extremely important matter.”
“It will become clear in the next few days what kind of investigation should take place,” Balint said. While the breach has been reported to Attorney General T.J. Donovan’s office in its consumer protection role, “the AG’s office is not the appropriate venue for an investigation,” she said.
State Rep. Laura Sibilia, I-Windham-Bennington, heard from two constituents who are concerned about identity theft as a result of the miscue. “I’m pushing for faster instructions for impacted Vermonters on protecting their identity,” she said. “This is a big deal.”
And Sears said constituents are “very concerned about their Social Security numbers being in the wrong hands and that they have someone else’s.”
Balint told the Democratic caucus that lawmakers “have an important role to play being the eyes and ears for our constituents.” She urged them to share as much information as possible on social media posts. “People need information in real time so they know we are on it.”