Minn. stops accepting TurboTax returns, for now

Customer looks at a copy of TurboTax on sale at Costco in Mountain View, Calif., Tuesday, Jan. 24, 2012.
Paul Sakuma / AP 2012

The Minnesota Department of Revenue has stopped taking tax returns filed with TurboTax because of concerns over potential fraud.

Revenue Commissioner Cynthia Bauerly said late Thursday her office heard from two taxpayers who found returns had already been filed in their names through TurboTax.

"We have identified what we think could be potentially fraudulent activity," Bauerly said, "and so we have taken steps to protect Minnesota systems and taxpayers by not accepting TurboTax-filed returns at this time."

The agency insists there was no "breach of Department of Revenue systems" and that it has "sophisticated technology in place to safeguard private taxpayer information."

The state is now looking at other returns made using TurboTax, which Bauerly said is one of the largest vendors for individual tax filing in the state.

She said other states have heard similar reports about TurboTax.

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This also isn't the first problem Minnesota's encountered with TurboTax.

Two years ago, state officials urged people not to use TurboTax to file their Minnesota taxes after experts found more than a dozen errors in the software, ranging from a miscalculation of the credit for married couples to an error in figuring property tax refunds.

Revenue department officials gave TurboTax the all-clear after the problems were fixed.

The Minnesota Department of Revenue estimates 267,000 returns have been filed so far this year, about 10 percent of the expected total.

The department said the company that owns TurboTax, Intuit, will staff a hotline for affected taxpayers, 800-944-8596, beginning at 8 a.m. Central time Friday.