MYRTLE BEACH, SC (WMBF) - Potential tax fraud is under review for many who may have used Turbo Tax to file their taxes.
More than 96,000 returns are being investigated by the South Carolina Department of Revenue. That's 15,000 more open investigations that this same time last year. This does not necessarily mean all these returns are fraudulent, that's just how many they're investigating right now.
SCDOR representatives say the security system has not been breached. So your information has not been compromised for their end. But the department is currently increasing their monitoring to make sure everything is okay.
Eighteen states across the country are experiencing the same kind of increase. The SCDOR has reason to believe the fraudulent filings result primarily from issues related to third-party commercial tax preparation software. And they've pinpointed that to TurboTax.
Last week Intuit, the parent company of TurboTax, paused transmission of e-filing returns because of all the extra fraud investigations. The company says after working with a security expert, they believe these extra reports of fraud did not result from a security breach of its system.
Local financial experts say these types of security problems are only going to get worse the more we rely on technology. "Because you can do things online. You know, it's a virtual signature. And if someone's going to steal your social security number, they're going to give a virtual signature by clicking the box or whatever it is. So you just have to consistently watch. At that point in time," says Christopher St. John with Carolina Wealth Advisors.
Intuit has since resumed e-filing for South Carolina. But because SCDOR is reviewing more returns than normal this year, that could mean that there will be a two to three day delay in processing your refund.
TurboTax and SCDOR are offering credit monitoring and identity protection services to those customers affected. Intuit is also giving those customers access to all versions of software or offering tax preparers who will prepare returns for free of charge.
There is not much you can do to guarantee your identity is protected. We know that all too well with the 2012 security breach of the South Carolina Department of Revenue. But there are some things you can be doing to make sure you're not making it easy for criminals to steal your identity. The key is to monitor your credit and identity regularly, and try to get your taxes done early. Because the longer you wait to do your taxes, the longer someone has the window of opportunity to steal your social security number, your identity, and your money.
But if you do get hacked, you'll immediately need to contact SCDOR and then you'll get a list of other departments and people to contact. You'll also have to fill out a special form proving the person who used your social security number to file is not you. Once you've gotten the ball rolling on reversing the fraud, then you need to start to recheck all of your personal accounts.
Having your identity stolen today, the nightmare will continue for years, according to tax experts, if you don't start to fix things right away. Local experts say the perfect example is the SCDOR's breach three years ago. "Even from that breach, it's not even that year, it's not 2 or 3 years from there. But it'll be 5, 10 years from there when people are recirculating and resold those social security numbers over and over," says St. John.
Once you've been a victim of identity theft, you will not be able to file electronically until the state and federal governments finally fix things. And that could take years.