Tags: intuit | halts | state | tax returns

Intuit Halts State Tax Returns After Uptick in Suspected Fraud

By    |   Friday, 06 Feb 2015 01:34 PM

Intuit has halted state tax returns temporarily in response to an increase in fraudulent filings.

So far, Minnesota, Alabama, Utah, and Georgia have all announced concerns over fraudulent e-filings. It all reportedly started when two people in Minnesota logged on to Intuit's TurboTax recently to file their state returns and got an error message saying that their taxes had already been done, according to the Star Tribune.

Minnesota's Revenue Department is now blocking all new TurboTax returns and is reviewing TurboTax filings already in its possession, which number in the "couple of thousands," state officials said.

"If we identify a problem, we will contact the taxpayer," revenue commissioner Cynthia Bauerly told the Star Tribune.

Brad Smith, Intuit president and chief executive, said in a statement to CNBC that the company's temporary halt in state filings was "precautionary" in nature.

"We understand the role we play in this important industry issue and continuously monitor our systems in search of suspicious activity," Smith said. "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."

Utah state tax officials said Thursday that they found 28 bogus filings from third-party vendors as well. In similar instances, taxpayers reported logging into TurboTax to file and then receiving messages that their returns had already been completed.

Ironically, Intuit announced Thursday that it plans to purchase Israel-based data security firm Porticor, a reported leader in cloud-based security.

"The fraud threat to U.S. financial and tax systems is well known, but seldom understood," Thomas M. Lenard, president and senior fellow of the Technology Policy Institute, said in a statement announcing the Porticor sell to Intuit.

"Last week's Washington symposium underscored the need for action. Fraud is a common enemy of government and industry, consumers and business. Solutions must come from collaboration and mutual strategy development between the public and private sectors working in common cause, and it should be undertaken as a national priority."

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Intuit has halted state tax returns temporarily in response to an increase in fraudulent filings.
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