Minnesota Stops Taking Returns Filed With TurboTax, Citing Possible Fraudulent Activity

UPDATE: Intuit announced this afternoon that it’s halting all state e-filed tax returns while investigating reports of fraudulent activity.

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Some TurboTax customers have already had quite a headache this year, and it looks like a whole bunch of Minnesotan customers are about to join the frustration club after the state announced last night it wouldn’t be taking any more returns filed with Intuit’s software because of possible fraud.

Revenue Department officials announced the news late Thursday after two taxpayers reported that they’d logged into their accounts to file, but were notified that a return had already been filed, reports the Star Tribune.

Because usually you’d remember something like that, state officials are concerned there’s been fraudulent activity, and have blocked new TurboTax returns coming in. They’re also combing through the couple thousand returns that have already been filed using TurboTax.

“If we identify a problem, we will contact the taxpayer,” said Revenue Commissioner Cynthia Bauerly.

Intuit opened a dedicated phone number for people concerned about the issue: 1-800-944-8596.

Minnesota is still accepting returns filed with Intuit professional prepare products like Lacerte, Intuit Tax Online and ProSeries.

Meanwhile in Utah, state tax officials chimed in that they’ve found 28 fraudulent filings from third-party vendors, with some taxpayers logging into to TurboTax to file and getting the same message as the Minnesotans — that their returns were already filed. Officials there say 18 states have identified similar issues.

Not being able to use TurboTax to file returns is likely going to cause a headache for many taxpayers, as almost 30 million people across the country use it, amounting to 60% to 65% of the market.

Minnesota stops taking TurboTax returns due to possible fraud [Star Tribune]