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Financial Planning > Tax Planning

Intuit Denies Putting Profit Before TurboTax User Security

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Intuit Inc., maker of tax-preparation software TurboTax, denied claims that it prioritized the processing of fraudulent state and federal tax refunds at the expense of customers.

Intuit temporarily halted filing of state tax returns earlier this month after learning that its software and services may have been used to file bogus returns. Accusations by former employees that Intuit put profit before customer security “doesn’t hold water,” the Mountain View, California-based company said in a statement Monday.

“We recognize that some employees who work in information security would like us to do more to prevent fraud, and we are committed to doing so as fast as we can to combat the constantly evolving and increasingly sophisticated methods of cybercriminals,” Intuit said. “But we cannot always immediately implement the most innovative methods to detect and prevent fraud without considering other factors.”

The statement follows claims from former security employees that Intuit failed to take basic measures to ensure customers’ safety. In an interview with cybersecurity-news blog KrebsOnSecurity, former employee Robert Lee said Intuit refused to implement a ban on using a single Social Security number across multiple TurboTax accounts, and limit the number of tax returns a single account can file. Management refused to adopt these precautions because fraudulent returns were profitable for TurboTax, Lee said.

U.S. taxpayers are typically issued refunds on national and state taxes already paid, creating an opportunity for crooks to file false claims for the money. Americans are in the middle of the annual tax-filing season ahead of an April 15 deadline.

Suspicious Filings

Criminals, using stolen identification information gather data on taxpayers, can create a phony TurboTax account in a person’s name to file for a tax return. In these cases, because the filing fee is deducted from the total amount of the refund request, TurboTax still receives payment when the Internal Revenue Service approves the fraudulent return.

Any revenue from suspicious filings is “immaterial to Intuit’s business, and simply does not drive a business decision,” the company said.

— To contact the reporter on this story: Antonia Massa in New York at [email protected] To contact the editors responsible for this story: Jillian Ward at [email protected] Reed Stevenson, Niamh Ring


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