Turbo Tax Resumes State Filings

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Late Friday, Turbo Tax announced it had resumed filings of state tax returns, one day after pulling the plug due to what it called "an increase in suspicious filings."

Many of the nation's newspapers had already gone to press Friday before the announcement, so this morning a number of Americans woke up to the news that Turbo Tax, the nation's biggest do-it-yourself tax preparation software, had stopped processing state tax returns after a rise in fraudulent filings. 

"We understand the role we play in this important industry issue and continuously monitor our systems in search of suspicious activity," said Brad Smith, CEO of Intuit, parent company of Turbo Tax. "We've identified specific patterns of behavior where fraud is more likely to occur."

Turbo Tax stopped processing state returns on Feb. 5, but company officials said an internal investigation found that the breaches were not a problem with their own systems. While the investigation continues, Turbo Tax decided to turn the state tax processing feature back on. 

"I am more than pleased we were able to resume transmission for our customers within about 24 hours," wrote Smith on Friday evening.

Officials with the Idaho State Tax Commission say they receive approximately 770,000 state tax returns each year, and nearly 80 percent are filed electronically.

Meanwhile, in January, H&R Block began offering its "Deluxe + State" desktop software free to taxpayers who already bought Turbo Tax's basic or deluxe products. Filers had to email SwitchToBlock@hrblock.com and include their name, address and proof of purchase.