TurboTax Stops E-Filing Of All State Tax Returns While Investigating Fraudulent Activity

After Minnesota state tax officials stopped taking all TurboTax e-filed returns last night and other states pressed pause as well amidst possible fraudulent activity, Intuit has announced that it’s halting all state e-filed returns while it investigates criminal attempts to use stolen data to file fraudulent returns and claim refunds.

Intuit says it’s looking into the possibly fraudulent activity after hearing from a handful of states with issues a spokeswoman told MarketWatch.

The company says it appears after a preliminary examination with security experts that it’s systems remain intact and haven’t been breached, but ne’er-do-wells may be stealing identities and then using TurboTax software to file the fraudulent returns.

In a press release, Intuit says that “the information used to file fraudulent returns was obtained from other sources outside the tax preparation process.”

If you’re worried about not being able to file your state return, Inuit says the pause is simple a “precautionary step,” so it would appear at this time that at some point, TurboTax will again accept state e-filed returns.

Utah reached out to Intuit first, notifying the company that state officials had flagged 28 fraud attempts “originate from data compromised through a third-party commercial tax preparation software process,” and an additional 8,000 returns marked as potentially fraudulent.

Tax officials in Minnesota and Alabama also posted similar warnings about the tax preparation software.

“We understand the role we play in this important industry issue and continuously monitor our systems in search of suspicious activity,” Brad Smith, Intuit president and chief executive officer, said in the release. “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.”

If you’ve already filed your return and it’s been paused, you don’t need to take any further action, Intuit says, as it will be submitted when the company resumes filing. Federal tax return filing hasn’t been affected, the company says.

Intuit’s spokeswoman tells MarketWatch that the hope is to resume filing state returns later today.

Any TurboTax customers who believe they are victims of tax fraud can call 1-800-944-8596 for direct access to “specially trained identity protection agents who will provide comprehensive support and filing assistance,” Intuit’s release says.

*Thanks for the tip, Steve!

TurboTax halts e-filing for state returns due to fraud, stealing of refunds [MarketWatch]