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Who’s at fault when using tax prep software?

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in Small Business Tax,Small Business Tax Deduction Strategies

Simply using tax preparation software won’t protect you from IRS penalties. A taxpayer who relied on the TurboTax program made several mistakes on her return. Because her tax deficiency exceeded $5,000, the IRS hit her with an accuracy penalty of more than $8,700. The taxpayer argued that she isn’t liable for the penalty because she used the software. Not so fast, said the Tax Court: The errors were her own fault. (Bartlett, TC Memo 2012-254)

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Bob Meighan December 24, 2012 at 8:07 am

Nothing new here. Although TurboTax catches most mistakes, no software can detect all mistakes that involve transposition errors, missing info and others where rules and logic are unable to flag such mistakes.

Bob Meighan
VP, TurboTax

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