The Rise in State Tax Refund Fraud
With all of the recent data breaches including the huge one at Anthem/Blue Cross/Blue Shield, there’s a lot more chance that your name could be used to file a false state return.
Scam artists stole billions of dollars last year from the U.S. Treasury by filing phony federal tax refund requests on millions of Americans. But as Uncle Sam has made this type of fraud harder for thieves to profit from, the crooks have massively shifted their focus to conducting refund fraud at the state level. Or at least according to Intuit Inc., the makers of TurboTax: The company says it believes that shift is responsible for a whopping 3700 percent increase in fraudulent state tax refund filings this year in some states.
Earlier this month, TurboTax was forced to briefly suspend state tax refund filings while it investigated the source of the unprecedented fraud spike. To learn more about the run-up to this extraordinary step and other tax fraud trends this year, I talked with Indu Kodukula, chief information security officer at Intuit.
Kodukula explained that in years past the dominant form of tax return scams the company has dealt with stemmed from phony federal tax refund requests. But this tax season, things changed dramatically.