Gotcha – Use of TurboTax Is Not a Defense
The Tax Court rejected a taxpayer’s argument that their use of TurboTax to prepare their returns caused them to misstate their income, which resulted in an IRS assessment and an accuracy related penalty. In the case Aileen Yat Muk Lam , TC Memo 2010-82 (Tax Ct.) the wife argued that they consistently filled out their tax returns using TurboTax and she consistently confused capital gains and losses with ordinary income and expenses. The court rejected her argument noting that “tax preparation software is only as good as the information one inputs into it.” Just one more reason to use a professional tax preparer!
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