Tax Court: If You’re Gonna Use TurboTax, Use It Correctly(Geithner can do it, but you can't)

wsj ^ | 4/20/10 | Ashby Jones

[bestintxas]

It’s April 20. Which means that, in addition to taking the day off to smoke weed, you filed your tax return last week. On both fronts, you’re feeling pretty good. On the former, your clients will totally understand that you can’t get to that filing because you’re busy munching almond M&Ms and watching Wizard of Oz synched to the Dark Side of the Moon (again). And on the latter, well, TurboTax says you get a refund. And nothing ever ever goes awry with TurboTax, right?

Well, not exactly. Mistakes do get made while using the popular software program. And when they do, it ain’t necessarily gonna fly as an excuse with the U.S. Tax Court.

The Tax Court on Monday rejected the taxpayer’s use of the “Geithner defense” and held that blaming TurboTax for errors on her return did not excuse her from penalties. Click here for Paul Caron’s post at the TaxProf blog. (During his confirmation hearings, Tim Geithner blamed some of his tax issues on problems with tax-preparation software.)

The Tax court opinion reads:

Petitioners’ 2004 and 2005 joint Forms 1040 … were prepared by Ms. Lam using TurboTax. . . . [The IRS] claims that petitioners were negligent in the preparation of their 2004 and 2005 federal income tax returns. . . . At trial respondent argued that petitioners did not seek the help of a tax professional, consult the IRS, visit the IRS’ Web site, or otherwise read any instructions for filing a Schedule C and thus petitioners did not behave reasonably in filing their 2004 and 2005 tax returns. At trial Ms. Lam repeatedly argued that petitioners consistently filled out their tax returns using TurboTax and that she consistently confused capital gains and losses with ordinary income and expenses. Although the Court concludes the errors

[bestintxas]

The Courts are making a mockery of allowing those in power to get away with what the common citizen cannot.

[Spok]

“(Geithner can do it, but you can’t)”

Geithner filed??

[WOBBLY BOB]

[RobRoy]

More and more this country reminds me of Animal Farm.

[TheCPA]

TurboTax and its professional equivalent of ProSeries are very good tax preparation programs. No program is perfect, and occasional errors in the software may occur. In general, they are very good at processing the information placed into them. Whoever is preparing the tax return must know where to put things. The tax law is quite complex. I believe that the vast majority of people should have their tax returns prepared by tax professionals.

[colorado tanker]

consistently confused capital gains and losses with ordinary income and expenses

Disguising ordinary income as capital gains is not TurboTax's fault.

[bestintxas]

“The tax law is quite complex. I believe that the vast majority of people should have their tax returns prepared by tax professionals.”

This is a reality that demostrates why we need to change the tax code.

Taxpayers should not be subject to this type of treatment by our Government, i.e. You cannot understand the law.

[Repeat Offender]

"Did you really think that we want those laws to be observed?" said Dr. Ferris. "We want them broken. You'd better get it straight that it's not a bunch of boy scouts you're up against - then you'll know that this is not the age for beautiful gestures. We're after power and we mean it. You fellows were pikers, but we know the real trick, and you'd better get wise to it. There's no way to rule innocent men. The only power any government has is the power to crack down on criminals.

Well, when there aren't enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted - and you create a nation of law-breakers - and then you cash in on guilt.

Now, that's the system, Mr. Rearden, that's the game, and once you understand it, you'll be much easier to deal with." Ayn Rand "Atlas Shrugged"

We are a nation of laws, not men John Adams

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. Section I of the 14Th Amendment to the US Constitution

[MrB]

And, if you haven’t figured it out yet,
that’s EXACTLY what they have in mind for this country.

[barb-tex]

I have useg Turbotax for many years and have never had any problems. The only time I have ever had was when I was using my Windows machine and did not believe it and TT, so i calculated by hand. Would you believe IRS agreed with TT rather than me. since then i believe the numbers.
barbra ann

[kosciusko51]

Good Post. Some days I think the Dem playbook is right out of Atlas Shrugged.

[Repeat Offender]

Same here. It’s like a race between “Atlas Shrugged” and “1984.”

[RobRoy]

>>And, if you haven’t figured it out yet...<<

Ah, but I have. It is either that or they are mindbogglingly stupid. I just don’t think they are that stupid. I did a decade ago. It crossed a line a while back.

[Nachoman]

In the old days before tax software, if I had a tax question, I would call IRS three times. If I could get two answers that agreed, thats the information I would run with.

This year, I ran both TTax and Tax Cut. When I got the same result on both programs, that’s the return I submitted.