TurboTax Resumes E-Filing of State Returns After Data-Breach Probe

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Pause in service provides a chilling reminder of the heightened threat of identity theft at tax filing time.

TurboTax is once again filing state tax returns after reports of fraud prompted the company on Friday to issue a temporary halt to the e-filing of state returns.

According to The Washington Post, TurboTax identified a number of “suspicious filings,” as well as efforts by scammers to file fraudulent returns using stolen personal information.

“We’ve identified specific patterns of behavior where fraud is more likely to occur,” Brad Smith, president and chief executive of Intuit, TurboTax’s parent company, said in a statement. “We’re working with the states to share that information and remedy the situation quickly.”

Julie Miller, spokeswoman for Inuit, which manufactures TurboTax, told The New York Times that so far, there have been no problems with federal tax returns because the IRS has adopted stronger fraud detection policies than the states.

Intuit is working with security company Palantir to investigate the potential fraud. The Times said:

So far, there has been no security breach of its systems, Intuit said. Instead, company officials say they think personal information was stolen elsewhere and used to file returns on TurboTax.

So, it appears your information is safe with TurboTax, and the fraudulent returns were filed with personal information stolen from other sources. Still, in an effort to further thwart fraud, TurboTax added extra security measures, such as multifactor authentication. The Post said:

Filing early is typically viewed as the biggest defense against tax refund theft, since it reduces the chances that someone else can file using stolen information. Customers who think their identity was stolen can report the fraud by calling TurboTax.

In other TurboTax news, amid outrage from customers, the company recently backtracked on changes it made to its deluxe desktop software program.

The changes required users to spend more money to upgrade to a different version of the software if they needed to access specific forms – Schedules C, D, E and F – which had been included free in the desktop version, until this year. Now users can upgrade for free.

Do you use TurboTax? Share your comments below or on our Facebook page.

For more details on identity theft and other scams that crop up during tax-filing season, and tips on how you can avoid being a victim, watch the video below:

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