Had problem with 2019 TT PC with IRS claiming I had not reported income. It was appealed, adjusted. Does Turbo Tax offer any support services for a fee to avoid this?

[kerkar]

How does this happen in the first place if everything is electronic? BTW, some of that income was 1099Q and IRS still charged 10% penalty although the form said zero. Is this a TT issue or IRS issue?

[GeorgeDenseff]

File a 100% accuracy guarantee claim.  It will be researched, TurboTax will pay the penalty if it was a calculation error in TurboTax

What is the TurboTax 100% Accurate Calculation Guarantee? (intuit.com)

[Critter-3]

@kerkar 

The 1099-Q is one of those forms that doesn't get reported on an income tax return UNLESS you did not use the distribution for qualified education expenses.  It is common for the IRS to question the distribution but it is an easy response to an IRS letter which may not have ever been questioned if you did not also have other missing income ... so the CP2000 that was sent included all missing docs.    This is not a TT or user error so it could not have been predicted.

[kerkar]

Thank you JD and C3. But my concerns are as follows: 1. Schedule C top line is sum of all 1099 Misc (we get about 5-10). Twice now (2017, 2019) IRS claimed we didn't report one of them, and I had to send them calculations as to how they add up and flow through to Schedule C. 2. We submit all kids' college expenses to 529 plan and they reimburse and report to IRS as eligible expense. Then why does IRS say we never reported that either? As I stated earlier, since it is electronic filing, IRS computer data should match Turbo Tax data without having to send them paper copies of forms with explanations? It is a hassle dealing with this since it takes months before the matter is closed. Hence my concern - is there a glitch between Turbo Tax and IRS systems? And, should I hire a CPA starting 2021 (have always used Turbo Tax, but seldom had IRS question returns)? Or, does Turbo Tax provide a service for a fee that will take over these hassles and resolve them? PS: Is faxing IRS same as certified mail?

[Critter-3]

1. Schedule C top line is sum of all 1099 Misc (we get about 5-10). Twice now (2017, 2019) IRS claimed we didn't report one of them, and I had to send them calculations as to how they add up and flow through to Schedule C.

As long as you report all the income you made from all sources on line 1 of the Sch C you should not have any issues with the IRS ...  you must report at least as much as the total of all the 1099 forms.  Why the IRS is asking about this is a mystery if you are completing the form correctly.  If you complete an accurate return then you have nothing to fear from an audit ... it is a hassle but nothing to worry about... just keep accurate timely records. 

2. We submit all kids' college expenses to 529 plan and they reimburse and report to IRS as eligible expense.  Again this is one of those quirks in the tax law as I already mentioned ... they questioned this mostly because they were questioning other items on the return.  Every once in a while one of my clients will get a letter about this but it is easily resolved.  Nothing you or TT can do to be more proactive on this matter. 

[Critter-3 · Accepted solution]

PS: Is faxing IRS same as certified mail?

If the IRS notice allows you to fax information then it is the same as certified mail ... keep a copy of the transmission record.