A class action complaint filed in federal court claims that Uber Technologies Inc. has engaged in widespread tax fraud by willfully filing fraudulent information returns with the IRS.
The lawsuit, brought before the U.S. District Court for the Southern District of Florida March 23 on behalf of individuals who have never worked for the company but received tax forms indicating they earned income from Uber, claims the practice is a result of the company’s lax driver screening policies that enable identity theft.
Claims of Widespread Identity Theft
The lead plaintiff, Damian R. Josefsberg, claims he was the victim of Uber’s tax fraud after the company filed a Form 1099-NEC, Nonemployee Compensation, with the IRS reporting it had paid him $1,236.50 in nonemployee compensation in 2021. According to the complaint, Josefsberg has never driven for Uber or received any payments from the company. The lawsuit alleges that thousands of other non-driver taxpayers have similarly been impacted.
The complaint argues that for a victim, receiving a fraudulent tax form is confirmation that Uber allowed an “Unscreened UBER Driver” to use their Social Security number, paid that driver without knowing their true identity, and then “willfully made a fraudulent and false statement to the IRS” about payments the victim never received.
The complaint asserts that these fraudulent filings are not isolated errors but the direct result of what it calls Uber’s “Barrier-Free Driver Screening Scheme.”
Alleged ‘Barrier-Free Driver Screening Scheme’
According to the lawsuit, Uber’s business model requires the rapid enrollment of a large number of drivers. To facilitate this, the company allegedly permits driver-applicants to use stolen personally identifiable information (PII), including Social Security numbers, of other individuals to pass its screening process. These individuals, referred to as “Unscreened UBER Drivers,” may otherwise be unqualified to drive due to criminal records, poor driving histories, or a lack of legal authorization to work in the United States.
The complaint alleges that Uber’s acceptance of these drivers “has effectively eliminated all barriers to becoming an UBER driver.” As a result, the lawsuit claims, “An individual with a criminal record, an unsafe driving record, and/or no authorization to work in the United States can simply use someone else’s ‘clean’ and ‘authorized’ PII to receive access to the privileges and the status of an UBER driver.”
The complaint argues that while Uber publicly promotes its driver screening policy, its internal practices create a loophole that allows unqualified drivers onto its platform using stolen identities. Income earned by these drivers is then allegedly reported to the IRS under the name and SSN of the identity theft victim, while the payments are routed to the driver.
Private Right of Action and Recourse
The legal basis for the class action is IRC § 7434, which provides a private right of action for victims of fraudulent tax information filings. The statute allows an individual to bring a civil action for damages against any person who willfully files a fraudulent information return with respect to payments purported to be made to that individual.
The lawsuit seeks to represent a “Nationwide Class” composed of “[a]ll individuals in the United States for whom UBER reported to the IRS on an Information Return that UBER paid money or other compensation to those individuals when those individuals did not receive any money from UBER for the tax year in which UBER reported to the IRS that it paid such compensation.”
Under § 7434, a successful plaintiff is entitled to damages equal to the greater of $5,000 for each fraudulent filing or the sum of their actual damages, costs of the action, and reasonable attorneys’ fees. Actual damages may include costs incurred to resolve tax deficiencies with the IRS, payments to tax professionals, and lost income from time spent addressing the issue.
The complaint details the “concrete injuries” suffered by the class, which include facing tax liability for phantom income, paying professionals to resolve the errors, and losing income from time spent dealing with the matter.
The complaint states that the plaintiff has already incurred more than $6,500 in out-of-pocket expenses to address the issues caused by the fraudulent Form 1099-NEC. In addition to monetary damages, the lawsuit requests injunctive relief to prevent Uber from continuing the alleged practices and require the company to file corrected tax forms with the IRS.
The case is Josefsberg v. Uber Technologies Inc., No. 1:26-cv-21930-JEM.
For more on civil damages for filing fraudulent information returns under § 7434, see Checkpoint’s Federal Tax Coordinator ¶ S-4470.
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