TurboTax Fraud Concerns Across Multiple States Lead Intuit To Halt State Return Transmissions

After Minnesota announced concerns over TurboTax fraud, the tax filing service has said that it will temporarily stop the processing of state tax returns. Alabama and Utah issued warnings after Minnesota's halt on state filing processing due to concerns over possible fraudulent activity.

As the StarTribune shares, Minnesota made the announcement regarding TurboTax fraud concerns on Thursday after two taxpayers reported that they ran into issues. The taxpayers have said that after they logged in to Intuit's TurboTax to do their return, they were advised that returns had already filed.

Intuit Inc., the company behind TurboTax, now says it is working with a security company to check into the potential problem. Intuit says there has been no security breach on their end. Rather, they suspect that any TurboTax fraud was a result of personal information being taken from elsewhere and then being used to file false tax returns.

For now federal tax returns can still be filed via Intuit's TurboTax. State returns that have already been submitted will be reviewed and anybody else planning to use the service for state returns will have to hang tight for now.

Utah says that they have found 28 fraudulent state tax filings from third-party vendors. Officials from the state indicate that they are aware of 18 other states that have come across similar problems.

Minnesota says that they will still accept state returns done via Intuit's professional products which include Intuit Tax Online, ProSeries and Lacerte. According to ABC News, Intuit will be working with the states that say they are finding TurboTax fraud concerns to get electronic transmissions turned on again. The company says that those who have already done their returns do not need to take further action at this point.

The popular tax preparation service, which is used by an estimated 60 to 65 percent of the market, has already suffered some bumps and bruises this season. The company increased the price of some TurboTax products in ways that some customers found to be a bit sneaky. Certain schedules, such as Schedules C, D and E, suddenly prompted users to upgrade and spend more money than they've needed to in the past.

The changes lead to a rash of negative reviews on Amazon, for example, where TurboTax product reviews plummeted in short order. While Intuit says that the current TurboTax fraud concerns come from outside the company, customers are feeling anxious. According to CNN Money, Utah and Alabama officials indicate that they have found thousands of suspicious filings this year already and many other unnamed states are said to be seeing similar issues. The issues come on the heels of popular health insurer Anthem facing security concerns as well.

Can Intuit bounce back from these TurboTax fraud concerns? Will similar issues pop up with other tax preparation services as the tax season goes full throttle?

[Image via KSL]