TurboTax Suspicious Filings in 2015

By | February 7, 2015

TurboTax shut down access to state tax return filing after the company found what it called “an increase in suspicious filings.” Identity theft is a growing problem for the American taxpayer. Recently, the Internal Revenue Service revealed that it paid $5.2 billion in fraudulent identity theft refunds in 2013.

TurboTax Suspicious Filings in 2015

The tax-preparation software company has found an increase in criminal activity where stolen personal data are used to file fake state returns with state authorities. This illegal act allows fraudsters to claim tax refunds from state government. Particularly, Minnesota noted that it would no longer accept tax returns submitted through Intuit’s TurboTax program because it had noticed potential fraud. The state’s department of revenue said that some taxpayers filing through the platform had encountered a message that they had already submitted tax returns, despite having not yet done so.

Intuit has implemented a plan that includes a dedicated toll-free number, 800-944-8596, with direct access to specially trained identity protection agents who will provide comprehensive support and filing assistance.


What is the security concern with TurboTax?

One way how a potential fraud works is someone who has your SSN is able to create an account with something like turbotax or any other online tax prep site. They can then create a fraudulent return using your SSN to get a huge refund. If you file your taxes with turbotax (or any of the others), they keep your previous years returns on file so you don’t have to fill out the stuff that gets pulled from your previous returns. If someone has your SSN, then it fills that in for them and they can then create their false return and hopefully steal some money from the state without the return getting flagged before the refund is sent.


What is the TurboTax Scam?

Turns out people are creating dumby accounts with scratch information, and then just using the SSN of the taxpayer to submit a fraudulent form. TurboTax’s services just assume you are the same filer from the previous year and lets you send in the return with completely falsified information, as long as you had the correct SSN on the scratch account.People have just been creating accounts on TurboTax using stolen data from a number of different ways (one I heard was a massive identity theft in Miami where people were breaking into hotel rooms and stealing personal information).



Avoiding Security Issues with TurboTax

The problem they are having is when the actual person goes to file their taxes on TurboTax, an identity thief has already filed one using their information. And this is for State filings only, Federal filings have more fraud protection on their end. TurboTax is working with a company right now to see if they can boost their fraud protection on their end but it is kind of hard when the thief’s have all of the person’s personal data for verification.