New York – TurboTax, the country’s most popular tax preparation software, said Friday it has temporarily stopped processing state tax returns due to an increase in fraudulent fillings.
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State agencies have reported a rise in fillings that are using stolen personal information, said Inuit, the company behind TurboTax.
Most victims found out that a fraudulent tax return was filed in their name after receiving a rejection notice after filing their returns, said Inuit spokeswoman Julie Miller.
There haven’t been issues with federal returns because the Internal Revenue Service has implemented stronger fraud detection policies, Miller said.
The company is working with security company Palantir to investigate the problem. So far, Intuit said there was no security breach of its systems. Instead, it believes personal information was stolen elsewhere and used to file returns on TurboTax.
Intuit said state tax returns already filed since Thursday will be transmitted as soon as possible. The halt doesn’t affect federal tax returns. Users can still use TurboTax, and the company will file the state tax return when the halt is lifted. The company expects to start procession state returns again on Friday.
TurboTax processed 30 million tax returns last year, Miller said.
Shares of Intuit Inc., based in Mountain View, California, fell $3.05, or 3.3 percent, to $88.65 in morning trading Friday.
Plus they now cause buyers to upgrade to a more expensive version to get all the schedules.