TurboTax, the country's most popular do it-yourself tax preparation software, said it had to halt filing state tax returns for a day because of an increase in fraudulent filings.
Here are seven ways to protect yourself against a tax scheme.
State agencies have reported a rise in filings with stolen personal information, said Intuit, the company behind TurboTax.
Most victims found out that a fraudulent tax return was submitted in their name when they received a rejection notice after filing their returns, Intuit spokeswoman Julie Miller told the Associated Press.
So far, there has been no security breach of its systems, the company said.
Instead, it believes personal information was stolen elsewhere and used to file returns on TurboTax.
There haven't been issues with federal returns to date because the Internal Revenue Service has implemented stronger fraud detection policies, Miller said.
But KIRO 7 spoke with a Whatcom County woman who says someone filed a federal return in her name and she believes her TurboTax profile was hacked.
Lisa Letchworth made the discovery Tuesday when she logged onto TurboTax to file her taxes.
"The thing that bothers me the most - my children have become victims," Letchworth said.
She only has one logical explanation.
"The tax return is so accurate," Letchworth said. "It looked to me like somehow someone got into my TurboTax account."
The only thing off was her place of employment, which changed from last year.
"It's so clear to me this thing was transferred from what I filed in TurboTax in 2013," she said. "This fraudulent return is federal."
KIRO 7's Siemny Kim contacted Intuit, the maker of TurboTax, to askwhy it's only flagging state tax returns and not federal ones like Letchworth's. The company said it's only seeing suspicious activity with state filings.
Letchworth hadn't heard a peep from TurboTax until Friday.
"The only reason I believe I got a call back from this particular person is because of media involvement," Letchworth said.
Letchworth also contacted the IRS, which told her it could take months to sort out the issue.
Intuit is working with security company Palantir to investigate the problem.
Miller linked the problem to recent security breaches at large companies.
Just this week, Blue Cross Blue Shield insurer Anthem Inc. said hackers gained access to the Social Security numbers, names, addresses and other personal information of about 80 million people. It follows other security breaches at JPMorgan Chase and several retailers, including Home Depot and Target.
"You have a pretty rich pool of data out there in the world," Miller said. Intuit said state tax returns already filed when the halt began on Thursday will be transmitted as soon as possible. Consumers can still use TurboTax, and the company will file the state tax returns when the halt is lifted.
The company started processing state returns again on Friday afternoon with increased fraud protections, said Miller.
The Associated Press and KIRO 7 anchor Siemny Kim contributed to this story.
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