Kentucky temporarily halts processing of e-tax returns
LOUISVILLE, Ky. (WDRB) -- The Kentucky Department of Revenue has put a hold on processing electronic tax returns as the state looks into adding screening criteria and additional security measures.
Processing of all electronic tax returns was halted by the state Friday after TurboTax -- the most popular self-filing system in the country -- announced that it had flagged an unusual amount of fraudulent tax returns. TurboTax had also put a temporary hold on processing state returns, but a spokesperson for the company said it resumed filing by Friday evening, with increased fraud protections in place.
Criminals use stolen personal information to file fake returns and receive money. University of Louisville law professor Michael Losavio says often all it takes is a person's social security number, name and date of birth.
"The key identifiers -- name, social security number, date of birth -- can come from thousands of sources," he said. "It sometimes helps if you can get access to information about where they work and what they're paid, but you don't need that. You can just make it up."
Losavio said part of the problem is the lack of identity confirmation. A criminal can file the return from behind a computer using basic personal information, and have the return deposited onto a pre-paid debit card.
"You dont have to go to a bank, you don't have to go to a post office box. You can go to a series of ATM machines and just draw out cash," he said. "The same things that make electronic commerce so much easier have given us the chance to have a whole new criminal class."
Fraudulent tax returns are a growing issue, according to Kevin Fuqua, the head of the tax services division at Louisville accounting firm MCM.
"This is frequently happening more and more each year," he said. "Personally -- my clients -- I probably had four or five last year. And we have 20 tax partners here."
Fuqua said if a fraudulent tax return has been filed using your name and social security number, state and federal authorities won't be alerted to the issue until you go to file your taxes.
"The tax payer gets a notice that their returns have already been filed," he said. "Individuals social security numbers get stolen, someone processes the return, more than likely they are putting fictitious information in order to get a return."
Fuqua said for victims of tax fraud, getting the issue sorted out and getting your tax return money will take six to nine months.
Intuit, Inc., TurboTax's parent company, has set up a dedicated call center for those who believe they are victims of tax fraud. That number is: (800) 944-8596. You can also call the Kentucky Department of Revenue taxpayer assistance line at (502) 564-4581.
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