Federal Return - TurboTax error

[ptownjab]

What is the name of your state? Virginia

I filed my 2005 federal and state taxes using TurboTax Online, via their website. When I did so, I entered ~$8,000 as federal taxes with held on my W-2. Last week, I received some mail from the IRS stating that my federal return had ~$12,000 reported, exactly $4,000 more than I had originally reported.

The first thing I did was go to TurboTax's website, and download my 2005 return, which did in fact have the correct number. It appears, that even though I entered one number, TurboTax reported another number. Now the IRS wants a check for $4,000 + interest. I have no recollection of what my federal refund actually was, as back in those days I was still single running the streets. Now I'm married, so I track every nickel we spend. I consulted my credit union, and since they had a major overhaul of their computer systems in 2006, they no longer have records that I can access to verify the over payment by the IRS.

TurboTax has basically told me that they have done nothing wrong. Is there any recourse I can pursue against TurboTax to have them pay the $4,000 (of course I'd have to collect that as income on this year's return)? Perhaps civil damages? I don't want a penny more than the IRS would make me pay.
Thanks

[abezon]

You were not damaged. It's your responsibility to file an acurate return & to ask the IRS what the heck's going on if you receive $4000 more than you asked for. You might not have noticed an overpayment of $400, but you'll never convince the IRS you didn't notice an extra $4000 in your account. You'll also never convince them you didn't receive the $4000 if their records show they paid it. Unless you can produce bank records showing that your refund deposit was actually $x, the exact amount you requested on your Turbo Tax return. Pitch a hissy fit with your bank. They could still be audited for 2006, so they darned well have the records. They're just gonna charge you for searching them. Threaten the state banking regulators if you don't get anywhere.

The government gave you $4,000 more than it should have & now wants its loan repaid. You've had the use of that $4000 for over a year. Make payment arrangements.

Now if you think that $4000 went into someone else's account, you *might* get the IRS to waive the interest & penalties up 'till now, providing you can prove you never got the money.

[irsos]

Originally Posted by ptownjab

What is the name of your state? Virginia

I filed my 2005 federal and state taxes using TurboTax Online, via their website. When I did so, I entered ~$8,000 as federal taxes with held on my W-2. Last week, I received some mail from the IRS stating that my federal return had ~$12,000 reported, exactly $4,000 more than I had originally reported.

The first thing I did was go to TurboTax's website, and download my 2005 return, which did in fact have the correct number. It appears, that even though I entered one number, TurboTax reported another number. Now the IRS wants a check for $4,000 + interest. I have no recollection of what my federal refund actually was, as back in those days I was still single running the streets. Now I'm married, so I track every nickel we spend. I consulted my credit union, and since they had a major overhaul of their computer systems in 2006, they no longer have records that I can access to verify the over payment by the IRS.

TurboTax has basically told me that they have done nothing wrong. Is there any recourse I can pursue against TurboTax to have them pay the $4,000 (of course I'd have to collect that as income on this year's return)? Perhaps civil damages? I don't want a penny more than the IRS would make me pay.
Thanks

I am wondering if you are confusing taxes withheld with taxes due. You may well have entered $8,000, the amount withheld, but Turbo Tax correctly calculated you owed an additional $4,000. In other words, you did not have enough withheld from your check. Turbo tax does not owe the money - you do. Even if it was their error, at most you are out any penalty, the tax and interest are yours. You may want a professional to assist you, it would not take very long to figure out what actually happened. I would start with a copy of your W-2 and a Transcript of Account.

[LdiJ]

I will also add that any tax return prepared using Turbo Tax is a "self prepared" return. Therefore you can never hold Turbo Tax responsible for any errors.

Plus, electronically filed returns can only file the data that is imputed.

[ptownjab]

Originally Posted by LdiJ

I will also add that any tax return prepared using Turbo Tax is a "self prepared" return. Therefore you can never hold Turbo Tax responsible for any errors.

Plus, electronically filed returns can only file the data that is imputed.

I appreciate your input...BUT...the electronically filed return was WRONG. Plain and simple. As for the $4,000...I don't doubt I received it....but I do carry a balance of over $30,000 in my checking, and have for some time. So it isn't as if all of a sudden there was this huge transaction. I also agree that the IRS deserves their money back. However, doesn't TurboTax assume some liability for correctly filing the data entered? I have a copy of my federal return, and it is accurate. The problem is that they filed $4,000 too much in the tax withheld line. That is my qualm. This error could lead to future IRS audits which would be troublesome and burdensome on me, and would never occur had this error not occured. When it comes to the IRS, I am always overly conservative and honest!

[irsos]

Originally Posted by ptownjab

The problem is that they filed $4,000 too much in the tax withheld line. That is my qualm. This error could lead to future IRS audits which would be troublesome and burdensome on me, and would never occur had this error not occured. When it comes to the IRS, I am always overly conservative and honest!

We either have to believe that you entered $ 8,000 on the tax withheld field and Turbo Tax sent it thru as $12,000 to the IRS or that you entered $12,000 when it should have been $8,000. Remember, Turbo Tax did not "enter" anything - you did ALL of that. I doubt very seriously this was a Turbo Tax error.

What I think happened was this. There was $8,000 withholding on your W-2. You entered correctly entered $8,000. Turbo Tax properly calculated your tax to be $12,000. You were under withheld by $4,000. You now owe $4,000.

One last comment This error is not going to increase you chances of an audit at all.

[LdiJ]

Originally Posted by ptownjab

I appreciate your input...BUT...the electronically filed return was WRONG. Plain and simple. As for the $4,000...I don't doubt I received it....but I do carry a balance of over $30,000 in my checking, and have for some time. So it isn't as if all of a sudden there was this huge transaction. I also agree that the IRS deserves their money back. However, doesn't TurboTax assume some liability for correctly filing the data entered? I have a copy of my federal return, and it is accurate. The problem is that they filed $4,000 too much in the tax withheld line. That is my qualm. This error could lead to future IRS audits which would be troublesome and burdensome on me, and would never occur had this error not occured. When it comes to the IRS, I am always overly conservative and honest!

If the electronically filed return was wrong, YOU had to have made the error....sorry, but that is simply reality. You imputed the data and at no time would or could Turbo Tax have changed that. If something went wrong with a transmission, then the whole return would have been rejected by the IRS.

Its like a fax...either you get EXACTLY what the person sent, or the whole thing is messed up and can't be read.

[Zigner]

If TurboTax messed up, they will reimburse you for the interest & penalties. The original tax is still payable by you.

[LdiJ]

Originally Posted by Zigner

If TurboTax messed up, they will reimburse you for the interest & penalties. The original tax is still payable by you.

Again, you need to read the whole thread, because Turbo Tax returns are self-prepared returns, therefore Turbo Tax is not liable for interest and penalties. Also, the error he believes was made by Turbo Tax, can't happen.

[Zigner]

Originally Posted by LdiJ

Again, you need to read the whole thread, because Turbo Tax returns are self-prepared returns, therefore Turbo Tax is not liable for interest and penalties. Also, the error he believes was made by Turbo Tax, can't happen.

TurboTax "guarantees" that if they (through their online service) make a calculation error which causes you to pay penalties and/or interest, they will reimburse you for said penalties/interest.
( http://turbotax.intuit.com/corp/guarantees.jhtml )

I agree that the error he is claiming happened is *almost* impossible...

[LdiJ]

Originally Posted by Zigner

TurboTax "guarantees" that if they (through their online service) make a calculation error which causes you to pay penalties and/or interest, they will reimburse you for said penalties/interest.
( [url]http://turbotax.intuit.com/corp/guarantees.jhtml[/url] )

They are guaranteeing that the software works properly, they are not guaranteeing the preparation of the return or the accuracy of the data entry. Its still a "self-prepared" return.

I agree that the error he is claiming happened is *almost* impossible...

I can't imagine any scenario under which it would be possible. All Turbo Tax does is receive an electronic file which they in turn forward on to the IRS. They don't manually handle the files. I have no particular appreciation for Turbo Tax...in fact I don't like it at all, however this is an error that simply can't happen.

[Zigner]

Originally Posted by LdiJ

They are guaranteeing that the software works properly, they are not guaranteeing the preparation of the return or the accuracy of the data entry. Its still a "self-prepared" return.



I can't imagine any scenario under which it would be possible. All Turbo Tax does is receive an electronic file which they in turn forward on to the IRS. They don't manually handle the files. I have no particular appreciation for Turbo Tax...in fact I don't like it at all, however this is an error that simply can't happen.

If their software makes a calculation error, they will cover any penalties and interest - we both agree on that.

As for the error "can't happen" - I agree about 99.9%. GIGO. However, it is a computer and computers NEVER have glitches, right?


For the record: I believe the OP made the error in this case.

[LdiJ]

Originally Posted by Zigner

If their software makes a calculation error, they will cover any penalties and interest - we both agree on that.

As for the error "can't happen" - I agree about 99.9%. GIGO. However, it is a computer and computers NEVER have glitches, right?


For the record: I believe the OP made the error in this case.

Yeah, but a "glitch" wouldn't change what was data entered in just one box...a "glitch" would get the whole return rejected.

[Zigner]

For the record: I believe the OP made the error in this case.

[efflandt]

Doesn't TurboTax give you an electronic printout (PDF) of what they submitted to the IRS including figures for line numbers and refund?

Is it possible that you bought and sold some stocks, lost money, and didn't figure you had to file Schedule D (another poster made that error)? The broker reports the sales to the IRS, but the IRS has no idea of your cost basis if Schedule D is missing, so they consider all the sales as income. Or did you have any other 1099's (possibly with some withholding) that were not properly accounted for (company stock options, cashed out insurance policy, etc.)?

If the IRS was not that specific about what was wrong or you want more details about what they have on record for you during that tax year, you might file form 4506 or 4506-T. Maybe someone used your SS# to get a job.