VT Dept of Taxes Warns of Refund Fraud

Vermont is participating in conversations with other states and with software vendors, and in an abundance of caution, has immediately suspended the issuance of all personal income tax refunds temporarily as of February 4. As the tax season heats up, the Vermont Department of Taxes continues its vigilance to protect taxpayers and taxpayer money against any possible tax refund fraud, but the early signs are that states are seeing another increase in fraudulent filings this year. In fact, there are reports in other states of particularly troublesome fraud trends. Given the nature and level of fraudulent activity, concerns are being raised that a tax preparation software vendor experienced a data breach of previous year returns, however no such breach has been confirmed. The department is reviewing the situation, and will issue an update on when we will resume refunding as soon as possible. The potential identity theft and refund fraud is not related to any breach of Vermont government systems, but rather the use of identities stolen elsewhere.

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