Hackers Steal Online Filers’ Information, Take Thousands in Tax Refunds

Last week the Utah Tax Commission and the Minnesota Department of Revenue found thousands of potentially fraudulent tax returns, from thieves preying on people who use the popular filing program, TurboTax.

Intuit, the company that created TurboTax, temporarily stopped the transmission of e-filed state tax returns to implement additional security measures to prevent identity theft, and verified that its systems were not breached. However, they do believe the victims had their login information stolen from sources outside the tax preparation process.

“This is potentially the most serious breach of personally identifiable information in the history of our country” said Haywood Talcove, CEO for government solutions at Lexis Nexis, “The tax form is the mother lode of personal information.”

He believes the breach is the work of a “criminal gang, possibly working outside the country.”

This information includes victims’ Social Security numbers, date of birth, dependents, employers and adjusted gross incomes. The thieves use this motherload of information to file state and federal tax returns before the victims do, making it through the system and stealing their refunds.

One such victim is Lisa Letchworth, who says when she logged into her TurboTax account to start her federal refund last Tuesday, she was shocked to see a message on her screen saying her return had already been filed and her refund of $5,013 was being paid to someone on a prepaid card.

“It freaked me out,” she said, adding “It’s really frightening [and] painfully clear they got into my account.”

She saw the bogus returns the thieves had filed, using all the information from last year’s return, including the names and Social Security numbers of everyone in Letchworth’s family.

Now she and her husband will have to prove to the IRS that they were the victims of identity theft, since the criminals filed first. It could take up to six months to straighten out all the paperwork and to get them their refund.

To learn more about the breach and tips on how to protect yourself, check the news clip before.