Intuit, the maker of TurboTax, said Friday that federal authorities from the Department of Justice and other government agencies have asked the company for more information after a surge in tax fraud hit users of the popular do-it-yourself tax preparation software.
In addition to a formal request for information from the Department of Justice, the largest online tax preparation company said it has been in touch with Congress and the Federal Trade Commission. The Mountain View, Calif. company said it had expected the inquiries and would cooperate with the authorities.
“We are committed to fighting tax fraud, responding appropriately to that fast-evolving challenge, and striving to do the right thing by our customers,” David Williams, Intuit’s chief tax officer, said in a statement.
As The Washington Post reported this week, a spike in suspicious tax filings earlier this year raised questions about what online tax preparation services such as TurboTax should do to prevent fraud. The attacks highlighted the struggles of tax officials and private tax prep companies to adapt to the rising sophistication of online criminals.
While Intuit’s internal screening algorithms annually identify millions of returns as “suspicious,” internal documents obtained by The Post show, the company said it is up to the IRS to determine whether a tax return is fraudulent and reject it. “We do not have that authority,” the company said in a statement to The Post.
The issue has drawn the attention of Congress, which is planning to hold a hearing on tax fraud on Thursday. Intuit, for its part, has called for industry-wide standards clarifying how much tax preparation companies should do to prevent fraud.