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New Member

I used TurboTax online to prepare 2018 tax return and paid the taxes. Today IRS notify me that I have unpaid taxes with penalty and interests. Any liability on TurboTax?

 
5 Replies
Level 15

I used TurboTax online to prepare 2018 tax return and paid the taxes. Today IRS notify me that I have unpaid taxes with penalty and interests. Any liability on TurboTax?

Well TT doesn't pay your taxes YOU DO ... the only thing the program does is gives you the ability to set up a payment method  and that info is sent to the feds/state when you file and it is up to the feds/state to complete the payment transaction.   

 

So your only proof of payment is on your bank or CC statement ... was the payment made? 

 

Was it made timely ?

 

Was the return filed and accepted timely ? 

 

Is the notice for a late filing or late payment penalty ?  Is the notice correct ?  

Anonymous
Not applicable

I used TurboTax online to prepare 2018 tax return and paid the taxes. Today IRS notify me that I have unpaid taxes with penalty and interests. Any liability on TurboTax?

the notice should have specified the reason for the tax penalties and interest.  we can't see your return or notice.  so there could be many reasons.    examples

 

the IRS never got your payment or the payment was late

you failed to report all your income 

you took deductions or credits or claim dependents you weren't entitled to

you made a data entry error 

the IRS could have made a mistake 

 

since you prepared the return, TT would only be liable if a made a computational error.  none of the above are computational errors 

 

if the notice is not clear as to what happened you can contact the IRS 800-829-1040

 

New Member

I used TurboTax online to prepare 2018 tax return and paid the taxes. Today IRS notify me that I have unpaid taxes with penalty and interests. Any liability on TurboTax?

Thanks for your response. I understand that I am responsible for all my taxes. I am sorry that I couldn't provide the full context due to the limited number of characters I was allowed in the original post.

 

Here is the more detailed version of the story:

First of all, tax return and all taxes owed, as calculated by TurboTax, were all completed by the due date, 4/15/2019.

Then, in October, I received a notice from IRS, saying that there was a mistake in the 2018 schedule D worksheet. I googled about it and found https://www.accountingtoday.com/news/irs-fixes-schedule-d-worksheet-that-miscalculated-cap[product k.... According to the article, the error was not fixed on tax software service providers until 5/16/2019. Therefore, for sure my tax return was affected by this IRS mistake. The article also quotes IRS that "The correction results in a lower regular tax for most affected taxpayers, and a higher regular tax for a small number of the impacted taxpayers." I am unfortunately among one of the small number. This October notice only says that there is an error on schedule D instructions so I owe taxes. However, the exact amount will be in a separate notice. And today I received the separate notice, which includes the amount I owed, plus penalty, and plus interests.

 

So, from my perspective, I followed the rules and completed everything by the deadline. I trusted that TurboTax was doing my tax return correctly. In this case, IRS initially made a mistake, TurboTax carried over on that mistake. I am OK to pay the extra tax amount I owe. But I am not happy to pay the penalty and the interest charges.

 

I wonder in this case, what are my options and what kind of help TurboTax can provide.

Level 15

I used TurboTax online to prepare 2018 tax return and paid the taxes. Today IRS notify me that I have unpaid taxes with penalty and interests. Any liability on TurboTax?

If you purchased Audit Defense for your tax return, call Tax Resources, Inc. at (877)-829-9695, or report your notice on their web site at http://intuit.taxaudit.com/. Do not contact the IRS. Let Tax Resources contact them for you.

This is the membership email you should have gotten:  https://ttlc.intuit.com/questions/1901569-when-will-i-get-my-audit-defense-membership-kit

Also read the member agreement at this website -https://turbotax.intuit.com/corp/auditdefense.jsp

                                                
If you did not purchase Audit Defense:


TurboTax has a special phone number for help with IRS tax letters, which will be easier than going through regular Customer Support.   At the page below, click on the blue button that says "Get Help from TurboTax Support".  Then it will ask you what tax year is your letter.  Then it will ask you what the letter concerns. Then it will show you the phone number during posted business hours.


Level 15
Level 15

I used TurboTax online to prepare 2018 tax return and paid the taxes. Today IRS notify me that I have unpaid taxes with penalty and interests. Any liability on TurboTax?

The mistake in the Schedule D Tax Worksheet was made by the IRS, not by TurboTax. TurboTax, and all other tax software providers, followed the instructions that the IRS gave them. The IRS later discovered that the instructions they gave to the tax software providers were wrong. All the software companies made the correction to their software on May 16 because the IRS told them to do it on that date.


You probably do have to pay the interest. After all, you did have the use of the money for the additional time. The IRS is legally required to charge the interest, and is not allowed to waive it. I'm surprised that they are charging a penalty when the mistake was theirs. I suggest that you call the phone number on the notice that you received and ask them to abate the penalty, since the underpayment was caused by their mistake. But your gripe is with the IRS, not with TurboTax, and you have to resolve it with the IRS.

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