The modern process of filing a tax return often involves software and direct deposits. At first glance, this approach seems far more convenient than the paper-based forms of yesteryear.
It’s no wonder, then, that for Fiscal Year 2019, over 184 million returns were filed electronically. A substantial share of these were completed with help from dedicated tax software.
Unfortunately, today’s software solutions are far from perfect. Not only can programs be difficult to navigate, many contain outright errors that lead to trouble with the IRS. Should this situation arise, it’s important to take swift action — ideally with help from a tax resolution service.
The TurboTax Defense
Tax concerns related to software can either be attributed to the person preparing the return or an algorithm within the program. When the software is to blame, taxpayers may turn to a concept known as the TurboTax defense.
Courts have ruled that, when a taxpayer attempts to pay the right amount in good faith but is misled by tax preparation software, the company responsible for developing that software can be deemed at fault.
While the TurboTax defense can sometimes provide relief, it also holds significant limitations and should not be relied upon in lieu of working with a tax preparer in the first place.
Unfortunately, even when tax preparation appears to occur in good faith, a lot of grey area exists in matters involving dedicated software. Often, it’s safer to work with a tax preparer from the very beginning. After a mistake has occurred, however, it’s not too late to obtain relief from a trusted tax resolution service. An enrolled agent can provide assertive representation as you deal with the IRS.
If a software error has landed you in hot water, look to the Highland Tax Group for advice and advocacy. We can help you resolve the problem and reduce the potential for future tax issues.