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Maker of TurboTax facing class-action suit over ID theft

The maker of online tax software TurboTax is facing accusations from at least two people that it did not do enough to protect taxpayers from having their identities stolen, and allowed criminals to file tax returns in the victims’ names. The plaintiffs are seeking class-action status, which would mean that several people have been affected by Intuit’s alleged carelessness.

An attorney for both plaintiffs filed the suit in the Northern District Court of California. The lawsuit accuses Intuit of failing to take sufficient steps to protect one plaintiff’s personal data, and allowing a third party to file a tax return posing as the other plaintiff.

The first plaintiff last used the TurboTax software to file a tax return in 2011. In March, TurboTax sent her a bill for $242 for filing her taxes, even though she did not use the service this year. The bill claimed she also filed returns in four states. The other plaintiff says she never used TurboTax, but was also billed for supposedly using it. She says she must now file by paper as a result, forcing her to wait longer for her tax refund.

The attorney said that there are multiple people who have endured one of these experiences -- either having their personal data stolen from TurboTax, or non-customers having that data stolen from somewhere else, and used to file phony tax returns on the software.

In February, Intuit stopped processing state tax returns for 24 hours, after suspicious returns on TurboTax spiked, according to the Washington Post. Though Intuit says it improved its security measures during that time, a whistleblower suit later alleged that Intuit did not take sufficient measures to protect customer information or stop identity theft.

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