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Wow! Somebody did my state taxes for me. Wait a minute ...

Picture this: You've filed your federal income taxes via TurboTax and everything went fine. You've now received the document you were waiting for, and it's time to file those state taxes. You log into TurboTax, and ... your state taxes have mysteriously been e-filed.

Is this a new free service? All the tax info looks about right. You dig a little deeper and realize that your returns were accepted and refunds were due. You've already received your federal refund via automatic deposit, but your state refund is missing. If you kept digging, you would find that refund has been processed and deposited -- into someone else's bank account.

That's what happened to some unlucky taxpayers this spring, according to Intuit, TurboTax's parent company. So far, between 24 and 40 taxpayers have been identified whose tax refunds were stolen. Intuit says only around two dozen of them used TurboTax. Nevertheless, this issue, along with a suspicious spike in questionable state filings earlier this spring, caused Intuit to temporarily halt TurboTax e-filings. The issues have also garnered the attention of the FBI and the Justice Department.

How was this new tax crime accomplished?

One thing the affected taxpayers apparently had in common was that they had agreed to have their TurboTax fees taken out of the refund, rather than paying up front. Another thing they had in common was that they'd chosen to receive their refunds via direct deposit.

It appears that what happened might have been this: Hackers got into individuals' TurboTax (or possibly other online tax preparation) accounts, filed any unfiled returns, and changed the direct deposit information to accounts they controlled.

There might be another possibility, however, since the hack wasn't limited to TurboTax. When you agree to have your tax filing fees subtracted from your refund, the money may be processed through a company called Tax Products Group, which then subtracts the TurboTax fees and deposits the rest in your bank account. So, it's possible, if less likely, that the hackers accessed Tax Products Group's accounts.

One crucial question remains: Who is responsible for the security breach that allowed the tax crime to be committed? These hackers may never be found. So ... how do you get your money?

Source: The Washington Post, "Fraudsters found a new way to steal refunds from TurboTax customers," Jonnelle Marte, March 25, 2015

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