At least 18 states reported fraudulent activity for state tax returns completed with Intuit’s TurboTax software.
Various state revenue and tax commission agencies released statements on February 5th about fraud concerns in state tax returns. Between Alabama and Utah, there were at least 26,000 potentially affected tax returns reported, all of which were sourced to be from third-party commercial tax preparation software. Evidence pointed to Intuit’s TurboTax software.
In Utah, the fraudulent activity was detected by the Tax Commissions’ fraud detection systems that sourced the activity from outside software. Alabama made their detection through ADOR’s fraud detection system and claimed the compromised data also originated from an outside source. Both states confirmed that their own systems were not compromised. Only the state of Minnesota reported a pause in the acceptance of tax returns without releasing information on how many taxpayers were affected. For safe measure, Intuit temporarily paused state tax filing across the country on February 5th.
Intuit Taking Action
To address taxpayer concerns, Intuit teamed up with state agencies to tackle the issue.
“We’re 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,” said Intuit president and CEO Brad Smith.
An initial investigation with a third party security expert, Palantir, revealed that the instances of fraud did not result from a security breach of its systems, according to Intuit. The company now believes that the information used to file the most recent fraudulent returns was obtained from sources outside the tax preparation process.
“We understand the role we play in this important industry issue and continuously monitor our systems in search of suspicious activity,” said Smith. “We’ve identified specific patterns of behavior where fraud is more likely to occur.
On February 5th, Intuit temporarily paused state e-filing tax returns in all states and announced they will continue the investigation. The plan for Friday, February 6th is to work with all states in an effort to turn transmissions back on.
What You Should Do
If you filed your state tax return with Intuit software during the pause on the 5th, be patient. The company will have all returns transmitted as soon as possible. According to Intuit, these recent fraudulent activities will not affect filing of federal income tax returns or tax payers who did not e-file their state tax returns. Intuit spokesperson Julie Miller confirmed that the fraudulent returns were exclusive to state tax returns.
If you or someone you know may be a victim of tax fraud, Intuit has provided a toll-free, 1-800-944-8596, number with access to specially trained identity protection agents. You may call this number even if you did not use Intuit software but are still a victim of tax fraud. The trained agents can provide comprehensive support and filing assistance.
Reliable Tax Services
We’re just two weeks into the tax season, so there is still time to get your taxes filed. Contact us at 956-447-9009 to file your taxes with qualified and experienced professionals who have your best interests in mind. There’s no need to fret over paperwork or worry about fraud, we have you covered.