Is turbo tax audit defense worth it?

[wanaberetiree]

TT offers for $59 to get the audit defender, so I am wondering if we have actual people here who were audited and used this service?

 

[athena53]

I didn't bother. I've never been audited in the 40+ years I've been filing taxes. probably because DH (and my first DH) and I were wage slaves so our income was pretty much all reported to the government and they could match it up against what we reported on the tax forms. We've had pretty high income and some deductions (charitable, mortgage interest) that were well out of bounds for what we/I made at the time and still weren't audited.


99% of surviving an audit is record-keeping. That's controllable on your end. If you're taking deductions that require a lot of judgment (e.g., your income is from a small business you own) you should have a real accountant doing your taxes, anyway.


I should mention that I did hire a real accountant when I got a couple of scary tax notices, with demands totaling over $20K, right after I retired. One was from our state of residence and most of the problem was that I'd neglected to attach the return for the state where I worked to our 2013 return, so they set the credit for taxes paid to that state to zero, Nice. I'd also gotten cheap and had tried to do the residence state return by hand and missed a few "gotchas". The Fed notice was from 2012 and it turned out I had an incomplete download of transactions from the brokerage (there had been a merger mid-year) and owed taxes on that- but they also claimed that a 401(k) rollover of $10K was taxable because my employer left the "Taxable amount" box blank instead of entering a zero.

We consulted a local accountant. He was great. He zeroed in on the problems, he fixed our residence state return and handled the correspondence, and at his direction I dealt with the Feds. I think he charged about $250 for everything.

Long story short: save your money. In the rare instances when you do run into issues (and this is the first serious one I've ever had) you can get someone local to do whatever is needed.

 

[pb4uski]

I'd be surprised if any of the cheapskates here (myself included) sprung $59 for that, and once you combine that with the low risk of getting audited, remembering that you bought it, etc. it seems unlikely that you'll get a response, but you never know.

 

[Midpack]

I'd be surprised if any of the cheapskates here (myself included) sprung $59 for that, and once you combine that with the low risk of getting audited, remembering that you bought it, etc. it seems unlikely that you'll get a response, but you never know.

+1. Having never been audited in almost 40 years, including the last 15 or so while using TT, I'll take my chances. I was somewhat aggressively challenged on a deduction by the IRS once, sent in an equally aggressive response with even more proof than originally provided (back in the snail mail days), and they dropped it. I was surprised as I knew beyond any doubt it was a legitimate deduction or I wouldn't have taken it.

 

[Texas Proud]

I also agree there will not be a positive response from anybody on this forum... I did not respond when I first read the post since I did not fall into that category.... but read the responses so far and said 'what the heck'....


So, to the OP... nope, never audited by a person... have been audited by the computer a few times.... some they were correct, some they were wrong... but all were handled with a simple letter or amended return... or just paying up what they asked for (they were right)....

So my thought goes like this... my chance of getting really audited is probably less than .1%.... so I would need to pay $5,900 (plus inflation) for 'protection' that might not protect me when I need it... this protection cannot protect you if you are wrong... so I do not see any way there is a cost/benefit ratio that even comes close on this....

I would much rather pay for those extended warranties on a car than this... their cost/benefit is much better even though I do not think they are good bargains either...

 

[38Chevy454]

The audit defense can only assure that TT did a correct calculation. *YOU* put in the numbers and if questioned in an audit, *YOU* have to provide the supporting documentation. The audit defense can't say if you put in correct numbers or not, only that they put it in the right spot on the right form and did the correct calculation on those numbers.

So my simple answer is that no I never would pay for the TT Audit Defense.

 

[MichaelB]

I have doubts TT will be a reliable partner in a tax defense. In '01 and '02 they made a mistake with a $200 NY State tuition tax credit and had to be dragged, kicking and screaming, into acknowledging it ( 2 years later) and providing assistance for affected taxpayers.

The acknowledgement was a 3x5 post card with a one paragraph description of a possible "misinterpretation" and an invitation to find out more on their web site.

 

[wanaberetiree]

Such a negative reaction from the group !
Well, I think I will follow your advice thanks!

 

[Gatordoc50]

There are a few types of audits. Those done in writing and those done in person. I imagine many of us, especially those self employed, have been audited. I have been probably ten to fifteen times. Fortunately, all were fairly simple to resolve.

 

[easysurfer]

I used to religiously sign up for the audit defense. I never got audited and figure that the audit defense is more hype than anything. Kind of like scaring you into getting an extended warranty on a car purchase.

 

[Midpack]

I used to religiously sign up for the audit defense. I never got audited and figure that the audit defense is more hype than anything. Kind of like scaring you into getting an extended warranty on a car purchase.

+1. 'zactly.

 

[unclemick]

I'd be surprised if any of the cheapskates here (myself included) sprung $59 for that, and once you combine that with the low risk of getting audited, remembering that you bought it, etc. it seems unlikely that you'll get a response, but you never know.

I did - post Katrina sent my taxes to my LA accountant for a couple years - then went Turbo when we weren't moving back. Sprung for for the audit $ extra for several years.

Heh heh heh - never been audited so wasted money.

 

[pb4uski]

I did - post Katrina sent my taxes to my LA accountant for a couple years - then went Turbo when we weren't moving back. Sprung for for the audit $ extra for several years.

Heh heh heh - never been audited so wasted money.

I'll tell you what... send me $59 and I'll promise to defend you.

 

[braumeister]

I agree it's mainly a scare tactic.
I've been audited twice, and both times the issue was easily resolved with a simple exchange of letters with the IRS.

 

[M Paquette]

"Audits" are mostly just a simple exchange of letters. The IRS computer sees records that don't match what's on the tax return, and spits out a letter.

WE"RE REQUESTING INFORMATION ABOUT YOUR 2014 TAX RETURN

In our review of your 2014 tax return, we found what appear to be differences between income and/or deduction amounts you reported on your tax return and amounts reported to us by others...

Then they attach what information they have that doesn't match what you reported. Your job is to figure out which is right, i.e., the employer W-2 the IRS reported seeing or what you put on the tax return. You write up an explanation of the differences, maybe with copies of what you got, referencing their letter by the correspondence ID, and mail it to the IRS.

The IRS mails back an acknowledgement.

Thank you for your response of <DATE>.

We will contact you again within 60 days to let you know what action we are taking. You don't need to send us anything further or take any other action now on this matter.
...

You'll probably find out that you made a typo entering something by hand, and will get to file a 1040X to amend your return. If you find that you owe additional taxes, pay them ASAP to keep the penalty interest to a minimum.

I'm not sure what their 'audit defense' would even do for most cases, other than get in the way and slow down resolving a problem.

Please note that the IRS will never start an audit with a phone call or e-mail, or demand immediate payment, or threaten that the 'tax sheriff' has been given a 'sworn deposition' to arrest you. Those are scammers from the other IRS, the Indian Revenue Scam. The real IRS uses the US Postal Service for its initial contact.