Because Tennessee does not have a general personal income tax, the Department historically has not experienced problems with fraudulent returns, as many other states have.
During 2015, however, the Department received some suspicious Hall income tax returns where refunds had been requested. The Department investigated those returns and determined that they were likely fraudulent. The Department assured each affected taxpayer that his or her account would not be affected by the return.
The increase in the use of commercial tax preparation software has provided perpetrators with new opportunities to commit tax fraud. The returns noted above were created with this kind of software. The Department believes that the perpetrators were attempting to obtain fraudulent federal income tax refunds and chose to complete the applicable state return when it was offered during the return preparation process.