The U.S. Tax Court has ruled in favor of a taxpayer who made a data entry error when using Intuit’s TurboTax tax prep software.
The case involved Kurt Olsen, a patent attorney who works for an Energy Department laboratory. The IRS determined a deficiency in his and his wife’s joint income tax return for 2007 of $9,297 and an accuracy-related penalty of $1,859. His wife received interest income from a trust created by her mother’s estate, and Olsen used TurboTax to prepare the tax return. Because he had never dealt with a Schedule K-1 in the past, he upgraded the software to a more sophisticated version “as a precaution to ensure proper treatment of the unfamiliar form,” according to the ruling last Wednesday, which was reported on the TaxProf blog.
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