Another Good Reason To Allow Us To Compute Your Taxes This Year

September 15, 2012

Reliance on tax preparation software is no defense against an IRS penalty, the Tax Court says. Although a filer used the TurboTax program to do her return, she made several mistakes, and IRS assessed a 20% penalty because the deficiency was more than $5,000. She argued that she should not be liable for the penalty because she used tax software, but the Court said no (Bartlett, TC Memo. 2012-254). The errors were caused by her faulty input, not by a mistake in the tax program. In the Court’s view, tax software is only as good as the information entered into it.


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