Tax ID theft is reaching epidemic proportions. Well, it did last year when the IRS issued seemingly endless warnings about it. That wasn’t enough to get state taxation agencies to fix their systems, apparently, as TurboTax announced it has taken the extraordinary step of “pausing” state tax return filings for people who use the software. The firm said its own systems weren’t hacked, and that it was working with individual states to turn filing back on.
This is pure speculation on my part, but I think a good guess. “Free” has something to do with it. For the first time this year, TurboTax offered a method for filing state income taxes without cost, through its “Absolute Zero” promotion. That makes TurboTax state returns really attractive to would-be criminals.
Intuit, which owns TurboTax, is “working with state agencies to address growing concerns over state tax fraud,” the firm said in a blog post. “During this tax season, Intuit and some states have seen an increase in suspicious filings and attempts by criminals to use stolen identity information to file fraudulent state tax returns and claim tax refunds. ”
Tax ID theft has turned into a profitable, and fairly easy crime. Identity thieves simply file a tax return before the rightful holder of a Social Security number and intercept the refund. Victims usually don’t discover the problem until they try to file their taxes and are rejected.
“Customers who have already filed their state tax returns using Intuit software during this temporary pause will have their returns transmitted as soon as possible. They do not need to take further action at this time,” the firm said. The pause does not impact federal tax returns.
“We understand the role we play in this important industry issue and continuously monitor our systems in search of suspicious activity,” said Brad Smith, Intuit president and chief executive officer. “We’ve identified specific patterns of behavior where fraud is more likely to occur. 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.”
The firm said it would offer identity theft victim and credit monitoring services to customers who are hit by tax fraud.
“We understand the pain and frustration identity thieves cause taxpayers,” Smith said. “We know how important tax time is and our number-one priority is making sure peoples’ returns are filed timely, accurately, and safely.”
Be the first to comment