TurboTax Stops Filing State Returns Over Fraud Concerns

News: Intuit has temporarily halted the transmission of state tax returns filed electronically with TurboTax.

On 6 February 2015, Intuit temporarily suspended the transmission of state tax returns filed electronically with its popular TurboTax software due to several reports of fraudulent activity.

Intuit’s decision came after the Minnesota Department of Revenue announced it would no longer be accepting tax returns electronically filed via TurboTax:

Some Minnesota taxpayers have recently found that when they log in to TurboTax to file their tax return, they see that a return has already been filed. Due to this potentially fraudulent activity, we have stopped accepting tax returns submitted using TurboTax.

While Minnesota is the only state to officially announce it was no longer accepting TurboTax, several other states have reported problems with the software. The state of Utah, for instance, issued a similar statement explaining although the state’s computer system has not been compromised, the Utah Tax Commission has detected fraudulent filings:

The fraudulent filings originate from data compromised through a third-party commercial tax preparation software process and were detected through the Tax Commission’s fraud detection systems. All information in the State’s tax computer system remains secure and has not been compromised.

“We take very seriously our responsibility to protect the personal information of Utah taxpayers,” said John Valentine, Chairman of the Utah Tax Commission. “Our systems have not been compromised but we feel it is our responsibility to alert taxpayers who have potentially had their personal information compromised by a third-party tax preparation service, so they can take the necessary steps to protect themselves.”

According to Forbes, at least 18 states have reported an uptick in fraudulent activity.

Brad Smith, Intuit president and chief executive officer, said the company was working with Palantir, a third party security expert, to determine the cause of the problem. Smith said he does not believe there has been a security breach:

“We understand the role we play in this important industry issue and continuously monitor our systems in search of suspicious activity. Weve identified specific patterns of behavior where fraud is more likely to occur. Were working with the states to share that information and remedy the situation quickly. We will continue to engage them on an ongoing basis in an effort to stop fraud before it gets started.

Intuit has temporarily suspended the transmission of e-filed state tax returns, but the company maintained Federal tax returns have not been affected.

TurboTax customers who believe they have been the victim of fraud should call 1.800.944.8596 to speak with an identity protection specialist.

Last updated:   6 February 2015

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