State sends up red flag on TurboTax, related products

With the income tax filing deadline little more than a month off, the state of Minnesota is advising individual and business taxpayers not to use a line of electronic tax preparation services, including the popular TurboTax, because of "multiple issues" with tax returns.

"Our top priority is to make sure we process accurate returns and that we issue timely refunds," Terri Steenblock, assistant commissioner for the Minnesota Department of Revenue, said in a telephone news conference late Friday afternoon. "These issues are completely unacceptable to us, and we want these issues corrected immediately."

Several electronic tax programs produced by Intuit, including TurboTax and two programs used by accountants, were failing to record some filing information in recent weeks, Steenblock said. She said officials recently became aware of the issues from taxpayers as well as from Intuit itself.

State and Intuit officials have been meeting daily, Steenblock said. The company has held off on processing 11,000 Minnesota returns.

If the problems persist, the state will stop accepting returns that used Intuit software, Steenblock said.

Intuit spokeswoman Julie Miller said the company is working with the state to fix the problems, and takes full responsibility for what she described as human errors in coding.

Miller said there have not been problems in other states.

Among the known glitches in Minnesota, Steenblock said, is a failure to record whether taxpayers want to make a $5 contribution to the state's political parties or campaign funds. Miller said that problem was fixed Feb. 28 and will cost neither taxpayers nor the state any money.

But on Monday, revenue officials discovered that claims for deductions for educational expenses for multiple dependents on the M1M form had been noted only for one dependent.

On Friday, Intuit identified other problems with individual and business returns and too-large refunds on property taxes, Steenblock said. Some refunds were being issued by check instead of taxpayer-requested direct deposit.

A Turbo Tax website at http://tinyurl.com/a4l98wj offers answers to some questions about Minnesota returns.

Steenblock offered several temporary strategies for taxpayers:

• For those who have used an Intuit product, but not filed yet, wait until Intuit indicates it has solved the problems.

• For those who have filed using an Intuit product, call Intuit at 1-866-888-4609.

Miller said the company was communicating with its customers both electronically and by paper letter to alert them to the problems. She vowed that they would be fixed "in hours and days, not days and weeks."

"We are confident we've done a thorough review and that there are no more errors to be found," Miller said. "We're not waiting for another shoe to drop."

"We deeply appreciate the state's concerns," Miller said. "We stand behind the accuracy of our tax product. We hold ourselves to a higher standard, as does the state, as do our customers, and we need to do better."