A New Turbo Tax Scam

[Lee B]

COPIED FROM ACCOUNTING TECHNOLOGY:

 

 

By Danielle Lee

 

In a tax season plagued with identify theft and tax fraud, a new method of online criminal activity has been identified, according to Intuit’s statements to The Washington Post.

 

Typically, fraudsters file a tax return in their victims’ names to collect the refund. In February, a rash of taxpayers reported logging into TurboTax to discover their state return already processed, leading Intuit to temporarily halt TurboTax e-filing. Earlier this month, Intuit CEO Brad Smith joined other tax software leaders in a sit-down with the Internal Revenue Service to address the growing problem.

 

In this rarer form of theft, tax refunds are stolen after the return is filed by the taxpayer and accepted by the IRS, with fraudsters then changing the bank account information to divert the funds.

 

According to Intuit, between 24 and 40 taxpayers have been affected and about 24 of them used TurboTax. All of those customers had elected to have their filing fees taken from their refunds in a refund transfer.

 

After filing fees are withdrawn, refunds are transmitted to taxpayers with a deposit by Tax Products Group, owned Green Dot Corporation, a bank that works with tax-preparation firms. In these newly reported instances, taxpayers’ personal information is obtained so the refunds can be sent to another bank account.

 

This season’s fraudulent activity was not limited to taxpayers using TurboTax, and Intuit has since beefed up the product’s security. Intuit offered to front tax refunds for customers affected by the latest incident, Intuit spokesperson Julie Miller told The Washington Post. In a company statement, Tax Products Group also said it has improved security measures.

 

Asked for further comment, Miller said Intuit had no statement beyond what she told The Washington Post

 

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