Request A Confidential Consultation 502.272.9596

Identity Theft - Tax Refund Fraud

Identity Theft is far off of my usual topic of family law, I but feel compelled to urge readers to complete and file tax returns immediately.

Due to the number of data thefts that have occurred at large financial and insurance institutions, there are millions of pieces of information on taxpayers that are now widely circulating (most recently, Anthem's data on 80 million people was compromised). The purloined information can include full names, social security numbers, dates of birth, addresses, educational information and health information. Due to an extremely negligent decision by TurboTax (a division of Intuit), an option was created whereby refunds could be paid out on untraceable prepaid debit cards and Amazon gift cards with scant control on how much proof would be required for the recipient to verify identity.

This created a climate by which thieves could use all of that stolen data on a grand scale for the purpose of identity theft.

As of now, many thousands of innocent people have been affected by the use of compromised data for thieves to file returns using TurboTax and obtain refunds on those stolen identities. Minnesota, Massachusetts, Vermont, the District of Columbia, Utah and some other jurisdictions have halted accepting TurboTax filings, and TurboTax imposed a brief moratorium on all state filings on Friday while they attempted to determine if they had a software breach, their spokeswoman declaring that there isn't a Federal problem.

Yesterday, I spent 3.5 hours on hold with the IRS to the Practitioner Priority Line with regard to a fraudulently filed return where an identity thief claimed a Federal refund on the account of a Kentucky taxpayer (the bogus return claiming a Florida address); the taxpayer's name, Kentucky address, social security and date of birth were known. According to the representative I spoke with, the problem is massive this year, and is now consuming a huge amount of Service resources.

This problem goes well beyond TurboTax customers. Due to the ubiquitous nature of the data leaks, lifelong paper filers, those who use H&R Block or local accountants can be affected. As TurboTax still refuses to see that the problem lies with their unique system of issuing these refund cards with inadequate controls, I believe it unlikely that this will be over anytime soon, and that time will enable these thieves to continue stealing refunds until the prepaid debit cards are better controlled.

Right now, the best solution I can suggest is to file immediately, so as to deprive the thieves of the ability to hit you first.

If you already find yourself affected by this, I stand ready to assist. I've long held privileges with the IRS and am admitted to tax court; I'm familiar with the service requirements, forms and background documentation necessary to cure issues like these, and can provide solid guidance with what to expect as well as what to do. You can contact me using the number on this blogpage or my regular direct line, (502) 272-9596. You can also contact me via email,

Thanks for your attention to this!