Intuit has temporarily paused the transmission of TurboTax state e-filing after announcing it is working with state agencies to address concerns of fraud related to suspicious filings and attempts at identify theft to file fraudulent state tax returns and claim tax refunds.

Intuit and some states, including Minnesota, which announced Friday it is no longer accepting TurboTax e-filing, have noticed an increase in fraudulent activity this tax season.

In working with third-party security company Palantir on a preliminary examination of this recent activity, Intuit said it does not believe these instances of fraud resulted from a security breach of its systems, and that the information used to file fraudulent returns was obtained from other sources outside the tax preparation process. Intuit’s examination is currently ongoing.

“We understand the role we play in this important industry issue and continuously monitor our systems in search of suspicious activity,” stated Brad Smith, Intuit president and chief executive officer. “We’ve identified specific patterns of behavior where fraud is more likely to occur. We’re working with the states to share that information and remedy the situation quickly. We will continue to engage them on an ongoing basis in an effort to stop fraud before it gets started.”

After halting the transmission of state e-filing Thursday, Intuit will work with states Friday to begin turning transmissions back on. Customers who already filed their state tax returns using Intuit’s software during the temporary pause were to have their returns transmitted as soon as possible, according to Intuit, and do not need to take further action at this time. Intuit also said this action will not affect the filing of federal income tax returns and is limited to states that require returns to be filed.

Intuit’s plan of action Friday included a dedicated toll free number with direct access to specially trained identity protection agents who will provide support at 800-944-8596. Intuit was also providing identity protection services, free credit monitoring, and access to all versions of its software or to the assistance of one of Intuit’s credentialed tax experts who will prepare taxes for affected customers at no expense.

“We understand the pain and frustration identity thieves cause taxpayers,” Smith stated. “We know how important tax time is and our number-one priority is making sure peoples’ returns are filed timely, accurately, and safely.”

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