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Intuit TurboTax Resumes State Income Tax Filings After Fraud Attempts

A fraud outbreak caused Intuit TurboTax to suspend electronic state income tax filings until additional fraud protections were put into place. The tax-preparation software company found substantial evidence that criminals were using stolen personal data to file fake state returns with state authorities to claim tax refunds from state governments.

Now that the additional measures have been implemented, the company has resumed allowing consumers to file their state tax forms electronically through their programs.

Minnesota’s Department of Revenue has halted the acceptance of tax filings submitted electronically using TurboTax after several taxpayers using TurboTax found that filings had already been made using their information. The state is now reviewing thousands of other electronically sent state filings. Other states are also looking for patterns to help the states identify returns that are may be fraudulent.

The personal information used was not stolen from TurboTax, but may have been a result of some of the massive company breaches that have occurred over the past year. Brad Smith, CEO of Intuit, said in a statement, “We are taking this issue very seriously and from the moment it emerged it has been all-hands-on-deck.” The company said the investigation is ongoing.

The new measures are sure to cause headaches for consumers who are accustomed to their tax information being instantly filed with the click of a button. Only state income tax returns were affected and federal income tax returns could still be filed electronically using the TurboTax programs. TurboTax customers who already e-filed their state returns will have their returns resubmitted automatically when the consumer protections are fully in place.

Because the IRS has made it so easy for citizens to get their refunds, stealing tax refunds has become an attractive target for criminals. All of the personal information a criminal needs to fill out a fraudulent tax return is readily available on underground sites online that make the information available for purchase. Many people do not realize that their information has been stolen until they file their own tax return and receive notification from the IRS that a return has already been submitted. In 2013, the IRS paid $5.2 billion in refunds for tax documents filed with fraudulent identities, according to a report by the Government Accountability Office.

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