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Why the TurboTax Security Breach Should Worry Us

February 17, 2015  |   Tax Scams   |   Tags: , ,  

The security breach of TurboTax came as a blow to Intuit, the company that owns TurboTax. Even though after a brief shutdown and added security TurboTax was operational again, the breach shows what identity thieves are capable of. It is particularly worrisome because taxpayers had no control over preventing their identities from being stolen.

identity theft

Identity theft is steadily becoming a problem with no solution. Despite the efforts of the IRS to make taxpayers aware of identity theft, fraud continues to be a rampant problem. Scammers are hacking phones, stealing documents from mailboxes, and have now infiltrated tax filing software. Fox Business discusses how the problem of identity theft is quickly growing into an epidemic:

“So far, there’s little more to the Intuit/TurboTax story beyond what the company has said: that the suspension of services was a precautionary measure aimed at combatting fraudulent state tax returns (federal filings were unaffected, presumably because of national identity theft-prevention efforts). Intuit did not immediately respond to a request for comment from

“Consumers and experts in the field want to know more about why this happened, but while we wait for the TurboTax-specific details to emerge, there’s one thing everyone can very clearly take away from this event: Tax-related identity theft is a huge problem and it’s getting worse.

“It can be extremely difficult to know if your identity has been stolen. Prevention is practically impossible — for example, consumers caught up in the Anthem breach had no way of keeping their Social Security numbers out of thieves’ reach — but there are a handful of effective detection methods. Still, that generally requires someone attempting to fraudulently use your identity before you can stop them from going further.

“The Lesson: File Early

“With tax-related identity theft, it’s a race to see who files first: you or the thief. As far as fraud prevention is concerned, it’s in your best interest to file as soon as possible. Then again, this TurboTax incident involved people who were filing relatively early, and they still had their paperwork rejected, because someone had already used their information to file for a refund.

“This all culminates in a grim outlook for consumers trying to protect their identities. There’s no sure way to prevent fraud, but you can take measures to decrease your vulnerability to identity thieves: Try to file your taxes as soon as possible, and monitor your credit for signs of unauthorized use of your identity.”