Online Filers: Pay Attention to the Fine Print!
The arrows prompt you to keep clicking until you are fully registered and ready to begin filing your taxes through TurboTax, the inexpensive, do-it-yourself online tax return program.
Along the way, click by click, you agree that TurboTax, which is owned by software maker Intuit (NASDAQ:INTU), cannot be held liable for any fraud that might affect your return and get you into trouble with the IRS.
If you’re buying a retro 10-speed bicycle on an online auction site, signing away that liability might not be that important. But when it comes to filing your taxes, which if filed incorrectly could cause you substantial financial problems and years of headaches, you probably want to protect yourself!
So, it behooves you to pay attention to what you’re signing when you register to file your taxes online. Still…
“How many people do you think actually read all of the fine print -- what the company is responsible for and what it’s not -- in the software world?” Steven J. Weil, a tax expert and enrolled agent with RMS Accounting in Fort Lauderdale, Fla., asked.
We can probably all guess, not that many.
Thousands of those filers found themselves in a messy situation last week when it was discovered that fraudsters had used stolen personal data to register with TurboTax and file bogus tax returns. The victims of that identity theft are now stuck cleaning up the mess under the watchful eye of the IRS.
TurboTax concedes that it's seen an increase in this type of fraudulent activity. Thieves use the stolen information to claim other people's tax refunds.
But TurboTax differentiates between fraud committed against its users and mistakes made by its software program, according to Julie Miller, a spokesman for Intuit. TurboTax has an accuracy guarantee that addresses any potential errors in the software, Miller said. The guarantee says that if a filer pays an IRS or state penalty or interest because of a TurboTax calculation error, TurboTax will cover the penalty and interest.
In addition, TurboTax offers free one-on-one audit guidance from an “experienced tax expert,” as well as free answers to and audit questions, and free year-round assistance on what to expect and how to prepare for an audit.
TurboTax also assures its customers: “If you received an audit letter based on your 2014 TurboTax return and are not satisfied with how we responded to your inquiry, we'll refund the applicable TurboTax federal 1040 and/or state purchase price you paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid.”
But the company cautions: “We will not represent you or provide legal advice.”
Experts say this is why you may want to develop a long-term relationship with your tax preparer, especially if you are self-employed or otherwise have a complicated tax situation: so that if the IRS comes calling, you can go to the tax professional who has filed your taxes for years and who, presumably, can quickly locate the source of trouble.
That may be wishful thinking, but it’s certainly more likely dealing with a human being than with a software program.