Another Turbotax deceptive advertising incident

[Sparkydude]

Purchased Turbotax Premier on-line and although they state that you only pay after filing, I was advised by turbotax live "expert" that I could pre-pay and save money.

I can not use Turbotax to file my return as it can not accurately handle my tax situation. They are refusing refund because I was using on-line version, despite the fact that I will never file with Turbotax.

Anyone experience this deception? Perhaps time for another investigation into their advertising practices.

[xmasbaby0]

No one in the user forum can resolve a billing issue.  If you have a question about your TurboTax fees or billing, make sure you use the word “billing” in your request for help.  Do not use the word “refund.”

https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number

[Sparkydude]

Thank you for quick reply but did you ever try to get someone on the phone at Turbotax or receive a message back that was not from a bot?

[xmasbaby0]

@Sparkydude Yes, in fact, I have and I received excellent and courteous help.   I hope you will receive that too.

[CatinaT1]

I can not use Turbotax to file my return as it can not accurately handle my tax situation. 

What is your tax situation? Maybe we can help.

[Sparkydude]

I need to enter the IRA section 216 deduction separately from other real estate taxes, as allowed by the 216 deduction law

[taxlady28]

TurboTax is free to use and see if it works for your situation.  If it does not work, then you do not pay for it.   The reason they do not refund online is because there is nothing to prevent you from using it after you got your money back.  If it does not meet your needs, then you should not have paid for it.

If the policy was different, then most people would get their money back and then file for free.

I do understand that you were advised to pay early and save money.   That is not really deceptive advertising.  You did save money but were in the weird circumstance that the software did not meet your needs.   In your case, you should get refunded if the software really cannot work for you.

[CatinaT1]

I believe you are correct @Sparkydude. Give me a bit as I continue to research this further and how we can work around this.

[Sparkydude]

That would be great…any help appreciated!!

[CatinaT1]

Ok, my additional research shows me this is indeed limited and the SALT Deduction Cap is relevant. The IRS has issued an Information Letter confirming that this limitation applies.

IRS Issues Information Letter on SALT Deduction Cap’s Application to Co-Op
The IRS, in Information Letter #2020-0010, held that the SALT limitation under Section 164(b)(6) applies to the deduction taken into account by a tenant-stockholder under Section 216 for the tenant-stockholder’s proportionate share of the real estate taxes paid or incurred by a cooperative housing corporation.

Additional sources referenced: 

IRS Letter to Congressional Office Indicates that $10,000 Cap Applies to Deduction of Real Estate Ta...

IRS Information Letter: SALT Dollar Limit Applies to Tenant Stockholder (IRC §164)

26 U.S. Code § 216 - Deduction of taxes, interest, and business depreciation by cooperative housing ...

[Sparkydude]

Thank you for that. I am aware of the IRS information letter but that is not how the law is written and as I mentioned, despite the information letter, the IRS currently and has for the past 8 yrs accepted the 216 deduction without challenge. As Turbotax has so far declined to issue a refund, I'll have to eat the $198 to Turbotax and return to CPA for another $1000 or so. Thank you again for research but in the end Turbotax is defective in not following the IRS law as written.

[CatinaT1]

The information letter comes from the IRS and provides guidance on how to interpret the law. Just because the IRS has not challenged the deduction does not mean it is correct. It simply means your return has not been pulled for additional processing. They can internally audit returns at anytime and if yours was selected for examination, the deduction would be disallowed and they can go back any number of years to disallow claimed credits. 

As a tax professional, I can only provide you with guidance on the tax law. What you choose to do with this information is up to you.