Tax Court Rejects Geithner/Turbo Tax Defense

Tax Court Rejects Geithner/Turbo Tax Defense

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Tax Court Rejects Geithner/Turbo Tax Defense Bartlett v. Commissioner, T.C. Memo. 2012-254 (Sept. 4, 2012):

Petitioner admits that her income was misreported and that her taxable income was underreported. She maintains that she reported all of her income and that the mistakes made were "honest mistakes" resulting from her lack of familiarity with the TurboTax program. Petitioner claims she used the audit portion of the TurboTax program, believing the audit portion would catch any mistakes she otherwise might make. ...

It is apparent that a portion of the information petitioner entered into the TurboTax program was incorrect; hence the mistakes made (which resulted in the underpayment) were made by petitioner, not TurboTax. TurboTax is only as good as the information entered into its software program. See Bunney v. Commissioner, 114 T.C. 259, 267 (2000). Simply put: garbage in, garbage out.

Geithner Blames Turbo Tax For His Tax Troubles

Treasury Secretary nominee Timothy Geithner at his confirmation hearing that the mistakes in his tax returns were caused by his use of the TurboTax software program. Of course, as any tax professional knows, TurboTax (and any of the other leading software programs) easily calculates self-employment tax (as well as the disallowance of a dependent care deduction for the cost of your kids' overnight camps). The errors here were entirely Geithner's, not TurboTax's.


TaxProf Blog: Tax Court Rejects Geithner/Turbo Tax Defense

No big shocker there. The system as set up is the "honour system" for income reporting, whether you're self-employed or not. Whether you make a mistake in a software program or on paper, it's still your fault. Actually, they kind of take the guilty until proven innocent approach anyway.

But some of the things I've heard of people using as deductions is astounding. I heard of one family that somehow got it into their heads that if you buy a new house, the cost of window treatments (blinds, curtains, etc) was tax deductible, they whole extended family apparently used that one.

Simply because CRA accepts the return as filed, which they will barring any huge red flags, they think they're right to deduct them. God help them if they ever get a review or an audit.