TurboTax back to full speed after fraud concerns

Software maker Intuit had shut down the filing of state income tax returns via TurboTax due to worries over "suspicious" filings. But the company says there was no breach and filings have resumed.

Edward Moyer Senior Editor
Edward Moyer is a senior editor at CNET and a many-year veteran of the writing and editing world. He enjoys taking sentences apart and putting them back together. He also likes making them from scratch. ¶ For nearly a quarter of a century, he's edited and written stories about various aspects of the technology world, from the US National Security Agency's controversial spying techniques to historic NASA space missions to 3D-printed works of fine art. Before that, he wrote about movies, musicians, artists and subcultures.
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Software maker Intuit is once again transmitting state income tax returns filed by way of its TurboTax software.
After a fraud scare, software maker Intuit is once again transmitting state income tax returns filed by way of its TurboTax software. Intuit

After an inquiry into "suspicious" state-tax filings, software maker Intuit is once again letting TurboTax users e-file state returns with the program.

On Thursday the company had stopped transmitting state returns filed via TurboTax because of "an increase in suspicious filings and attempts by criminals to use stolen identity information to file fraudulent state tax returns and claim tax refunds," Intuit said in a blog post at the time. The company began transmitting state returns again on Friday afternoon Pacific Time after determining that the faked filings "did not result from a security breach of its systems," according to a follow-up post.

The Minnesota Department of Revenue had stopped accepting TurboTax returns Thursday, saying in a statement (PDF) that "some Minnesota taxpayers have recently found that when they log in to TurboTax to file their tax return, they see that a return has already been filed." Utah had also raised concerns about suspicious filings. The Minnesota department said there had been no breach of its own computer systems.

Fraudsters can easily go to an underground website to purchase personal data suitable for filing bogus tax claims, an identity-management specialist noted in comments to USA Today.

Intuit said it had instituted additional security measures and that it "continues to work with the states as they build their own antifraud capabilities and will share best practices as it works toward the best interests of the taxpayer."

The TurboTax news comes as cybersecurity has become a front-and-center issue. On Monday, President Barack Obama added $14 billion to his 2016 budget proposal, to beef up cybersecurity in the US and better protect government and private computer systems from hackers. That followed on the headline-grabbing hack of Sony Pictures late last year, which involved the film "The Interview" and resulted in personal information being stolen and embarrassing emails being released (on Thursday, Sony Pictures chief Amy Pascal, a participant in one such e-mail exchange, announced she was resigning). Also this week, Anthem, the No. 2 health insurer in the US, revealed that hackers had broken into its servers and stolen the personal information of as many as 80 million current and former members and employees.

Customers who tried to file state returns while Intuit was not transmitting them will have their returns sent "as soon as possible," without the customers needing to take further action, the company said. Federal tax returns were not affected. Intuit said it would provide identity protection services and free credit monitoring for customers who believe they are victims of tax fraud, and it provided a toll-free number to call for help: (800) 944-8596.

TurboTax has a solid following. The tax-prep software was used by 24 million people online or on mobile devices in 2012, a company executive told Bloomberg during that year.