Turbo Tax Fraud Calls Security of Online Tax Filing Into Question

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The Minnesota Department of Revenue has stopped accepting tax returns filed electronically through Intuit’s popular TurboTax software. Prosado comments on the safety and security of filing online after this most recent case of online tax fraud. http://www.prosado.com

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Any online [tax] system can be vulnerable. The risk is not worth it. It’s time for consumers to take the next step in the evolution of tax and accounting services and locate a local tax professional who meets their specific needs and budget.

On Feb. 5, red flags were raised in the Minnesota Department of Revenue. The safety and security of Intuit’s TurboTax, a popular consumer-oriented tax return filing software, was called into question when the Department received reports from two Minnesota taxpayers who alleged that their tax returns had already been filed upon logging into the software.

An official statement from the Minnesota Department of Revenue comments on the decision to reject returns filed via TurboTax, saying, “[We] do not take this step lightly. […] Our priority is maintaining the security of private taxpayer data and preventing fraudulent activity within our system.”

In a stopgap effort to minimize further fraudulent activity, the Minnesota Department of Revenue has stopped accepting tax returns filed via TurboTax. At the time of publication, it is unknown when or if the Department will resume accepting returns filed via TurboTax. Currently, the Department is analyzing 2,000 returns submitted through the popular income tax preparation software.

“It’s certainly a tough decision for [Minnesota], who is leading the way in rejecting these potentially fraudulent returns,” says Glen Ross, a senior official at Prosado, an online service that connects consumers with tax professionals throughout the U.S. “No doubt, similar instances of fraud could crop up in other states. While plenty of returns filed via TurboTax are certainly valid and untainted, the stakes are too high to blindly accept any and all of these electronic returns.”

“In 2015,” says Ross, “I think we will see more consumers turn to accredited tax professionals who can safely receive, process, and file their data with State departments, whether that’s in the brick-and-mortar setting or online. This most recent security breach involving TurboTax has certainly drawn many Americans’ attention to the dangers of cybercrime.”

While the TurboTax scandal has caused alarm for many Americans, other e-return software providers have been quick to absolve themselves of any fraudulent activity. H&R Block cites “sophisticated monitoring and quality assurance methods” in assuring customers no such fraudulent issue exists with its software.

“H&R Block and others are likely being completely open and honest with consumers,” says Ross, “in claiming that no fraudulent issues currently exist. However, these kinds of statements may be missing the mark. With this particular issue of fraud, the trouble doesn’t come internally from within TurboTax. Rather, investigators currently believe that the security breakdown is occurring in an external, third-party source. H&R Block and others could be every bit as vulnerable as TurboTax and other tax preparation software programs. It’s only a matter of time until they, too, become vulnerable to a security breach like the one we’ve witnessed in these last few days.”

In the meantime, Prosado is standing alongside accredited tax and accounting professionals in advising consumers to work directly with agents who can secure their data. “Quite simply,” says Ross, “any online system can be vulnerable. The risk is not worth it. It’s time for consumers to take the next step in the evolution of tax and accounting services and locate a local tax professional who meets their specific needs and budget.”

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About Prosado
Prosado is a web-based service that connects consumers with tax and accounting professionals around the country. Prosado allows customers to find accountants who meet their specific needs at the right price point. Tax professionals use Prosado to grow their client base and obtain new clients independent of their location. Prosado is safe, secure, and built on a network of trusted and verified professionals.

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