TaxAct Customer Accounts Accessed with Reused Credentials; Tax Return Details Accessed

Last year, TurboTax was involved in a tax time incident and this year, it’s TaxAct. The maker of the tax filing software learned late last year that some of its customers’ accounts (less than .25%) were accessed and information such as social security numbers, names, addresses, bank account information, and basically anything else found on tax returns was accessed by a suspicious party.

The company learned of this incident in early January and found evidence that an undisclosed number of accounts were accessed between November 10 and December 4, 2015. The attacker was able to view and possibly copy tax returns from those accounts.

If you use any tax software, it’s a good idea to check in on it more often than only around tax season. Change the password quarterly as you would other accounts, even if you don’t access it often. Make sure you use strong passwords and that they are unique for every online account. In this case, TaxAct users should change passwords now whether they were part of this or not.

In addition, those affected should diligently monitor their credit reports for at least the next two years. Report any suspicious activity to the reporting agency right away. Free credit reports can be obtained from each of the three major credit bureaus every year.

In this case, TaxAct has not found evidence of a network breach, but believes the perpetrators entered using passwords retrieved from another company.

Password reuse has been accused of many incidents, including the Fitbit warranty fraud earlier this year, the Uber incident of last year and the infamous “naked celebrity” scandal.

TaxAct suspended the affected accounts and customers should access their accounts and change their credentials in order to reactivate them. The company says it has taken steps to ensure something like this does not recur. It is offering one year of free credit monitoring, a $1 million insurance reimbursement policy, and access to ID protection experts if needed.