Intuit halted all the e-filing of state tax returns last week via TurboTax due to an increase in suspicious tax return filings. They had found a significant increase in fraudulent activity in up to 18 states with individuals using tax preparation software stemming not from a breach in the software, but from the data used to file the returns and brought into the tax preparation software. The scam preyed on individuals who had not yet filed their state tax returns for 2014 and left the honest taxpayers out in the cold when they went to file via the tax preparation software.
Intuit, the company that runs TurboTax has resumed accepting state tax returns and takes the position that this is a problem for all tax preparation software companies. However, the other tax preparation companies have released statements that they have not experienced the same problems. The state of Minnesota has taken it upon itself to let its taxpayers know that they will not accept tax returns filed using the TurboTax software.
So how do you avoid falling pray to the TurboTax scam?
The usual recommendations still hold:
The best advice is to file as soon as possible. The sooner you file, the less likely that a thief can use your data to file a fraudulent return.
For more about this, Kelly Phillips of Forbes has more details about the whole situation here.