Turbo tax Calculation error for the tax year 2020 leads to an audit and have to return of the refund amount with the penalty.

[sudhins]

Turbo tax Calculation error for the tax year 2020 leads to an audit and return of the refund with the penalty.

Is it Turbotax did a calculation mistake that now I have to return my 2020 refund with penalties and interest? I used Turbotax online portal to file my 2020 taxes and received a refund on time. Now after two years I received an audit stating a tax calculation error. I responded to the audit with all the required documents and Now IRS concludes I owe the refund money with interest and penalties to IRS which turbo tax calculated.
In response to the Audit report, IRS stated. “Thank you for the correspondence. Even though you have fully proven the 4,000.00 of education expenses for each of you, you both are over the qualifying age to claim the American Opportunity Credit. You should refer to our Publication 970 online @www.ire.gov under forms and publications for other options to claim the expenses. There is a per return limit of up to 10,000.00 of expenses for a 2,000.00 credit for Lifetime Learning Credit and your other option is Tuition & Fees deduction. One for Lifetime and one for the tuition deduction which is why we did not just take both of your totals and move both to take the Lifetime Learning Credit. Once you decide, you will need to send in the portal, a new form 8863 for one of you to take the Lifetime Learning Credit or a form for each of you to take the Lifetime Learning credit and if one each then one 8863 & form 8917 for the other to take the tuition & fees”

How did the turbo tax online portal let us proceed to claim the American Opportunity Credit if our criteria don't match? Is there any TurboTax team going to help or guide us to fix those messes or we are all by ourselves and pay the amount? need some suggestions.

[Mike9241]

here's a link for info on filing a claim under the Turbotax accuracy guarantee. all Turbotax will pay if your claim is valid is the penalties and interest since you would have paid the additional taxes regardless. 

https://turbotax.community.intuit.ca/turbotax-support/en-ca/help-article/tax-return/submit-claim-tur... 

[DoninGA]

@Mike9241 The link you posted is for the TurboTax Canada Accuracy Guarantee.

Here is the link for the TurboTax US Accuracy Guarantee -  https://ttlc.intuit.com/turbotax-support/en-us/help-article/intuit-account-billing/submit-claim-turb...

[Mike9241]

thanks. 

[fanfare]

@sudhins 

As you described it, this is not a TurboTax accuracy error.

It is your mistake.

Don't waste your time with TurboTax, it is practically impossible to qualify under the fine print terms of the accuracy guarantee.

[Critter-3]

There is no such thing as an upper age limitation to take either education credit  ... you can be 100 and still qualify.  You could be too young ... if you are a full time student under the age of 24 and a dependent on your parent's return you cannot get an education credit ... that credit goes to the parents.

Now what could have happened is that you used the AOTC 4 times already so you can claim the LLC instead which is something the IRS said you could do if you wanted ... I would amend the return to take that other credit ... something is better than nothing. If that is the case this is a user entry error for answering the question in the interview wrong and nothing covered by the Accuracy Guarantee.