Intuit has identified a bug in its Ohio state software that caused nearly 9,700 taxpayers to receive refund notices for enormous sums, while also addressing complaints from some domestic partners about the way it handles recent rule changes from the IRS.
The Ohio problems came to light last week after a taxpayer reported receiving a notice that the state would be sending a check for $200 million because it was unable to directly deposit the tax refund in her bank account (see Ohio Mistakenly Promises Taxpayer Whopping Tax Refunds). The Ohio Department of Taxation admitted that it had sent approximately 9,700 letters to taxpayers telling them that outsized refund checks were in the mail.
It turned out that the problem could be traced to a bug in TurboTax’s state software for Ohio, according to IDG News.
Intuit spokesperson Julie Miller sent me the following statement on what happened:
“An incorrectly formatted data field in the TurboTax Ohio state product affected a small number of customers—returns filed with TurboTax between Jan. 21-24, 2011 that indicated direct deposit. We immediately fixed the error so no additional filers were affected.
“As a result of this error, the Ohio State Dept. of Revenue mailed letters to these customers advising them that their refund will be sent by check instead of direct deposit. These letters included incorrect refund amounts that were shown due to the incorrectly formatted data field in TurboTax. The Ohio DOR subsequently sent letters to all impacted customers asking them to disregard the first letter and confirming their correct refund amount.
“This in no way affects the accuracy of the customer’s return or their true refund amount. We regret any inconvenience this may have caused our customers and appreciate the cooperation of the Ohio Dept. of Revenue to ensure our customers get their accurate refunds as quickly as possible.”
Intuit also took some criticism this week after reports emerged that TurboTax is not providing domestic partners and same-sex couples in California, Washington and Nevada with step-by-step instructions to help them take advantage of some recently released rules from the IRS on how to report their income if they don’t want to take just the standard deduction (see IRS Backs California Domestic Partner Property Law and Tax Guide Released for Same-Sex Couples). Couples who itemize their returns, or have income from investments, rental property, and other sources need to hire an accountant, according to the San Francisco Chronicle.
I checked with Intuit and received this statement forwarded by Miller:
“The IRS recently updated Publication 555 with more detail for Registered Domestic Partners in California, Nevada and Washington and same-sex married couples in California.
“TurboTax is currently up-to-date with the changes to Publication 555 impacting Registered Domestic Partners. Affected taxpayers who are comfortable with combining and splitting their income, based on the community property laws, can file their federal taxes with TurboTax now. However, this is a very complicated tax area and, unfortunately, we are not able to provide the step-by-step guidance that our customers are accustomed to at this time.
“We recognize that this is a very complicated area in taxes and understand that many taxpayers will want and need additional guidance. Because of this we recommend couples with investments, property, pensions, rentals, or a business seek professional guidance from a CPA or Enrolled Agent.
“Over the last several months, we have had a team of tax and product experts working closely with couples in this situation to help us deliver the best experience possible for our customers. We are not satisfied with the experience we are providing our customers this year and are committed to improving this experience in TurboTax.”
Intuit apparently has a to-do list for next tax season.