The U.S. Tax Court has again rejected a taxpayer’s attempt to pin the blame for their negligent tax return on tax preparation software.On Nov. 9, the court handed down an opinion finding against a petition filed in New Jersey by Henry R. Broderick.

According to court records, the petitioner blamed defects in his income tax return on software that he claimed to use in preparing the Form 1040 return. Broderick, who owns a consulting firm, understated his taxable income by more than $50,000, leaving him with no tax on his 2002 return. However, the court said the blame rested with taxpayer negligence -- which includes failure by the taxpayer to keep adequate books and records or substantiate line items properly.

According to the court, “Such a program is only an aid for preparation of a return and depends on careful entry of accurate information, which petitioner manifestly failed to do. Petitioner admits that he has the education to prepare and review his income tax return. ... Accordingly, petitioner’s use of software in preparing his return does not constitute reasonable cause for the errors in his return.”

The court rejected a similar "TurboTax defense" in February. The full opinion for the Broderick case is available at www.ustaxcourt.gov/InOpHistoric/Broderick.SUM.WPD.pdf.


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