The US tax season is once again in full swing, and with it a surfeit of fraud, scam campaigns and other mal-intended activities. Intuit TurboTax, one of the largest consumer online filing services, went so far as to temporarily halt its filings to look into potential fraud activity last week.
An increase in suspicious filings using stolen identities to claim tax refunds led the company last week to suspend its state tax returns and hire data consultant Palantir to investigate. The cessation lasted just 24 hours on TurboTax’s side, but the states of Minnesota, Massachusetts and Vermont have said that they still will not accept state tax returns filed through TurboTax software while the matter is still being investigated.
Fraudulent tax returns were estimated to cost the IRS $5.2 billion in 2014, according to an audit by the Government Accountability Office, with $24.2 billion in distribution prevented.
Intuit said that the issue is in no way connected to a breach of its systems.
“The information used to file fraudulent returns was obtained from other sources outside the tax preparation process,” the company said in a statement. The suspension was a “precautionary step,” it added.
The company has set up a dedicated toll free number to assist customers who believe they may have become the victims of tax fraud. And, it has implemented a multi-step authentication process to combat fraudulent log-ins that use weak passwords.
“We understand the role we play in this important industry issue and continuously monitor our systems in search of suspicious activity,” said Brad Smith, Intuit president and CEO. “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.”