Kentucky puts temporary hold on electronic tax returns

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FRANKFORT, Ky. (WKYT/WYMT) - TurboTax says it has temporarily stopped processing state tax returns due to an increase in fraudulent fillings.

Intuit Inc., the company behind popular tax preparation software TurboTax, says state agencies, including Kentucky, have reported a rise in fillings that are using stolen personal information.

The company is working with security company Palantir to investigate the problem. So far, Intuit says there was no security breach of its systems. It believes personal information was taken elsewhere and used to file returns on TurboTax.

Intuit says state tax returns already filed since Thursday will be transmitted as soon as possible. Users can still submit their federal income tax returns.

The Kentucky Department of Revenue says it anticipates just a few additional days to the refund process and hopes to return to normal processing late next week.

“We have strong internal controls to protect Kentucky taxpayer data and personal information,” said Mack Gillim, executive director of the Office of Processing and Enforcement. “With our internal fraud detection processes, as well as the fraud analytics evaluations our third party vendor performs, we are able to kick out thousands of fraudulent returns.”

According to the department, filing electronically is still safe and the quickest way for taxpayers to get their refund. This delay is temporary and the refund may take closer to two weeks for processing instead of 7-10 days.

The current issue is confined to returns processed through Intuit, Inc.’s TurboTax program. Intuit, Inc. is working closely with states to assess and resolve the issue.

In addition to states’ fraud detection systems flagging suspicious returns, some taxpayers tried to file their taxes and received a message through TurboTax saying their return had already been filed. This prompted calls to various state revenue departments further alerting them to suspicious filings.

Intuit, Inc. has set up a dedicated call center, 800-944-8596, for customers to call if they believe they have been victims of tax fraud. In Kentucky, taxpayers can call the Department of Revenue Taxpayer Assistance line at 502-564-4581.

Electronic filing in Kentucky has been available to individuals since the 1995 tax year. It is the only way to have a refund direct deposited. In the past five years, e-filing for individuals has increased from 65 percent to more than 84% in 2014.

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