Issue: Fraudulent Tax Filings

Lieff Cabraser has heard from people across the country who have received the shocking news that criminals have filed fraudulent tax returns using their name and identity. Invariably, legitimate tax-paying citizens endure extraordinary inconvenience and stress, incur significant costs to fix this problem, and delays in tax refunds, all of which can persist for years. Lieff Cabraser is dedicated to investigating the potential claims of these victims of tax fraud.

Taxpayers can learn that they were victims of tax fraud in one or more ways. Some taxpayers try to file their tax returns, only to learn from the I.R.S. or their state taxing authority that a tax return had previously been filed for that year under their name or social security number. Others may try filing tax returns using a tax preparation service — like Turbotax or H&R Block — only to be told by the service that someone has already used that very same service to file a return using their identity. Some taxpayers may unexpectedly receive a bill from these tax preparation companies, even though they never used their services, and find out that it’s a bill for the fraudulent tax return. Indeed, most often, victims report learning that the fraudulent returns themselves had been electronically filed through tax preparation services, like Turbo tax or H&R Block.

Fraudulent tax filings cause victims to incur significant expenses and spend hours dealing with the IRS, state tax authorities, their accountants, and others. In many cases as a result of the fraudulent tax filings, victims become ineligible to e-file tax returns, but must instead manually file their returns, for years to come.

Multiple lawsuits were filed in 2015 against one tax preparation company, Intuit, Inc., regarding fraudulent tax returns filed with Turbotax. Those lawsuits allege, among other things, that Intuit maintained inadequate security protocols that enabled fraudsters to open false accounts and file fraudulent tax returns in other peoples’ names through Turbotax. These cases seek monetary relief for the victims, and to force Intuit to make necessary improvements to its security to prevent the fraud going forward. More information about these cases is available here.

As the 2016 tax filing season (for tax year 2015) has gotten underway, Lieff Cabraser continues to receive reports of fraudulent tax filings, including fraudulent filings occurring through electronic tax preparation services