Turbo Tax Says They Made an Error

[RockyMtn]

Received an email from TurboTax today. Stated the following:

"Because of an error in a TurboTax calculation, you have overstated your allowed deductions allocable to investment income, leading to an understatement of Net Investment Income. As a result, you have underpaid your federal income tax.

We fixed the issue in TurboTax and we want to make sure you have the information to amend your federal tax return and pay the additional tax due".

Then it basically asks you to file an amended return, gives a link to directeion and asks you to print and mail to the IRS and state. So I run the fix and tax due does not change one cent for Fed or state.

Whole page of directions here:

https://ttlc.intuit.com/community/t...otax-cd-download-amend-instructions/00/854998

Question is, since nothing changed in amount due should I even bother to file an amended return or just not worry about it.

 

[SecondCor521]

I think the technically correct answer is to file an amended return if any of the intermediate lines on your return have changed, even if the amount due doesn't change.

In practice, I'd probably print the amended returns and the TurboTax web pages, file them away with that year's taxes, and not worry about it unless the IRS comes asking questions.

 

[GrayHare]

I'd refile only if there was a tax or possible tax difference. Changes that make no difference in the tax due, and won't change any future tax, I would not bother with unless requested by the IRS.

 

[lemming]

https://www.irs.gov/forms-pubs/error-in-tax-calculation-in-schedule-d-tax-worksheet-form-1040
I didn't get that email from turbotax but the IRS also put out a bulletin about Schedule D. I can't tell if they are the same problem. Both Turbotax and IRS are accepting blame.

 

[Potstickers]

IRS says --
If you are affected by this error, you don’t need to file an amended return or call the IRS. The IRS is reviewing all potentially impacted filed returns, including those filed before May 16, 2019, and will send correction notices to any affected taxpayers. Taxpayers who overpaid their tax due to the error will receive refunds. If you filed an amended return because you opted to recalculate your regular tax using the new worksheet to see if it changed, the IRS is currently processing those amended returns.

 

[Midpack]

More info from IRS https://www.irs.gov/forms-pubs/error-in-tax-calculation-in-schedule-d-tax-worksheet-form-1040

If I’m reading the line below right, many aren’t affected? And it might explain why some were notified, others not.

The tax calculation did not work correctly with the new TCJA regular tax rates and brackets for certain Schedule D filers who had 28% rate gain (taxed at a maximum rate of 28%) reported on line 18 of Schedule D or unrecaptured section 1250 gain (taxed at a maximum rate of 25%) reported on line 19 of Schedule D.

 

[RockyMtn]

https://www.irs.gov/forms-pubs/error-in-tax-calculation-in-schedule-d-tax-worksheet-form-1040
I didn't get that email from turbotax but the IRS also put out a bulletin about Schedule D. I can't tell if they are the same problem. Both Turbotax and IRS are accepting blame.

This appears to be an error in Schedule D. The notice I got from TurboTax is related to schedule 8960 and I don't see anywhere on that form where it rolls over to Schedule D.

Did anyone else get a notice from TT?

It appears that 8960 was released late and has had issues in the past based on research in the TT community forums. Maybe I'll just compare the two schedules and see if following the instructions from TT changed any numbers on the amended 8960 compared to the originally filed 8960 and then figure out what to do it they did.

 

[GrayHare]

More info from IRS https://www.irs.gov/forms-pubs/error-in-tax-calculation-in-schedule-d-tax-worksheet-form-1040

If I’m reading the line below right, many aren’t affected? And it might explain why some were notified, others not.

That's my understanding too. Usually an error that affects many taxpayers is noticed soon. Typically it's the quirk that applies to few returns that manages to go undetected for a relatively long time.

 

[cathy63]

https://www.irs.gov/forms-pubs/error-in-tax-calculation-in-schedule-d-tax-worksheet-form-1040
I didn't get that email from turbotax but the IRS also put out a bulletin about Schedule D. I can't tell if they are the same problem. Both Turbotax and IRS are accepting blame.

Not the same issue, but the two problems are likely to affect a lot of the same taxpayers, which should be a pretty small percentage overall.

If you have form 8960 in your filed return, it's worth downloading the TTax updates and following the process to create the amended return to see what the outcome is.

I agree with others that I wouldn't bother to file if the 1040X doesn't show any amount owed or due. It's easy enough to file it if the IRS sends a letter, and there's no penalty for waiting since you don't owe any tax. No point in asking them to take another look at your return and possibly confusing them with too much information.

 

[RockyMtn]

Not the same issue, but the two problems are likely to affect a lot of the same taxpayers, which should be a pretty small percentage overall.

If you have form 8960 in your filed return, it's worth downloading the TTax updates and following the process to create the amended return to see what the outcome is.

I agree with others that I wouldn't bother to file if the 1040X doesn't show any amount owed or due. It's easy enough to file it if the IRS sends a letter, and there's no penalty for waiting since you don't owe any tax. No point in asking them to take another look at your return and possibly confusing them with too much information.

Thanks Cathy. I think I will go back and compare the two 8960's (original and amended) and see what might have changed as i have updated TT. Unless something really sticks out I am inclined to do as you suggest and not bother filing an amended return.

 

[LOL!]

This reminds that I need to file my tax return before October 15.

 

[Ready]

Is Quicken on the hook for any penalties assessed as a result of their error?

 

[Midpack]

Is Intuit [-]Quicken[/-] on the hook for any penalties assessed as a result of their error?

The error was in the IRS instructions, how is that Intuit’s responsibility?

This only affects a small number of taxpayers (not me I reran my return yesterday), the IRS has acknowledged their role in the error, and there’s no indication there will be penalties. Most affected taxpayers will get refunds. So worst case you MIGHT have to file an amended return if you filed before May 16 - BUT they don't even want that yet. Stay tuned.

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, depending on the taxpayer’s individual return.

Affected taxpayers need not file an amended return with the IRS or call the IRS. The IRS is reviewing returns submitted prior to May 16; more information will be provided about this review later.

 

[ducky911]

Sounds like a new Monopoly Card

 

[cathy63]

The error was in the IRS instructions, how is that Intuit’s responsibility?

This only affects a small number of taxpayers (not me I reran my return yesterday), the IRS has acknowledged their role in the error, and there’s no indication there will be penalties. Most affected taxpayers will get refunds. So worst case you MIGHT have to file an amended return if you filed before May 16 - BUT they don't even want that yet. Stay tuned.

Well, there are two different issues. The Sched D issue is the IRS' fault and for that they don't want amended returns.

But the form 8960 issue seems to be Intuit's fault, and they do recommend you file an amended return for it. (I personally recommend only filing an amended return if it changes the total amount of tax.) They do have a guarantee and both the tax and initial penalty assessed should be covered by it. Here's that info: https://ttlc.intuit.com/community/c...ion-guarantee-or-100-accurate-expert/00/26065

 

[Midpack]

Well, there are two different issues. The Sched D issue is the IRS' fault and for that they don't want amended returns.

But the form 8960 issue seems to be Intuit's fault, and they do recommend you file an amended return for it. (I personally recommend only filing an amended return if it changes the total amount of tax.) They do have a guarantee and both the tax and initial penalty assessed should be covered by it. Here's that info: https://ttlc.intuit.com/community/c...ion-guarantee-or-100-accurate-expert/00/26065

Thanks. I didn't pick up there were two problems...

 

[SevenUp]

Received an email from TurboTax today. Stated the following:

"Because of an error in a TurboTax calculation, you have overstated your allowed deductions allocable to investment income, leading to an understatement of Net Investment Income.

Did Intuit give details on the error itself?

 

[ocean view]

Thanks Cathy. I think I will go back and compare the two 8960's (original and amended) and see what might have changed as i have updated TT. Unless something really sticks out I am inclined to do as you suggest and not bother filing an amended return.

When you do your comparison, also look for any carryover amounts that might change going into your 2019 return (credits, cap losses). You can still probably get away without filing the amended return, but you will need to change those carryovers to what they would have been if you had amended.

 

[leftyfrizzell1963]

I'd refile only if there was a tax or possible tax difference. Changes that make no difference in the tax due, and won't change any future tax, I would not bother with unless requested by the IRS.

+1

 

[audreyh1]

US Treasury mailed us a check for $2.05 with no explanation other than memo stating that it is a tax refund and that the $0.05 was interest.

Perhaps it is due to this issue?

 

[cathy63]

When you do your comparison, also look for any carryover amounts that might change going into your 2019 return (credits, cap losses). You can still probably get away without filing the amended return, but you will need to change those carryovers to what they would have been if you had amended.

If OP uses TTax 2018 to create the 1040X, then even if he doesn't file it, he can still use TTax 2019 to import the amended file (it contains the entire updated return, not just the 1040X form) and he will get the correct carryover amounts. There should be no need for manual changes next year.

I agree that it's still a good idea to look at the amended forms and really understand any differences though.

 

[audreyh1]

US Treasury mailed us a check for $2.05 with no explanation other than memo stating that it is a tax refund and that the $0.05 was interest.

Perhaps it is due to this issue?

OK we finally got a letter from the IRS explaining that our $2.00 refund was due to their error on the schedule D form.