TurboTax causes Oregonians to overpay, Wyden demands action

A collection of Intuit turbotax tax-filing booklets sit for sale on a stand at an OfficeMax in Corvallis OR, on May 13 2024.
A collection of Intuit turbotax tax-filing booklets sit for sale on a stand at an OfficeMax in Corvallis OR, on May 13 2024.
Carter Pardue

This tax season over 12,000 Oregonians filing with TurboTax experienced a software error which caused them to overpay on their state taxes. 

In a May 2 letter to Intuit, TurboTax’s parent company, United States Senator and Chair of the Senate Finance Committee Ron Wyden cited a recent report by The Oregonian which, according to Wyden’s spokesman Hank Stern, stated that the software error opted Oregon taxpayers into claiming the standard deduction on their state taxes when itemizing would have produced a larger refund.

“The state notified Intuit of the problem in early April but the company did not acknowledge it until a few days before the filing deadline,” Wyden said.

Stern said that the exact number of Oregonians affected and the amount which they overpaid on state taxes are still unknown.

“We are quickly working to resolve an issue impacting a small number of customers and actively engaging with those filers impacted to ensure their returns are correct and they receive the maximum refund they are owed,” Senior Manager of Communications at Intuit Tania Mercado said. 

This error is in stark contrast with TurboTax’s guarantee of a “maximum refund” for its users.

“As part of our tax return lifetime guarantee, we are committed to the accuracy of TurboTax tax filers’ tax returns to ensure they receive the maximum refund possible,” Mercado said.

However, as Wyden said in his letter to Intuit, stating a Federal Trade Commission report which showed how Intuit ran a series of deceptive ads which promoted “free” tax services, this is not the first time Intuit’s guarantees have come under question.  

“Intuit has a history of deceptive advertising but I expect it to make good on this guarantee,” Wyden said.

In the same letter, Wyden also posed 10 questions to Intuit, asking how they were going to address this problem and asked Intuit to respond to his letter by May 15. 

On May 13, Intuit General Counsel Executive Vice President Kerry McLean responded with a letter to Wyden.

In the letter, McLean mentioned TurboTax’s commitment to their lifetime guarantee of bringing their users the maximum possible tax returns as well as to fixing this error and that they have active dialogue with all of their tax administration partners.

“We have a demonstrated history of quickly working to resolve any issues and actively engaging with those filers impacted to ensure their returns are correct and that they receive the maximum refund they are owed,” McLean said.

McLean also said that Intuit wished to clarify that the bug had no impact on filers’ federal returns. 

“We confirmed the issue on April 25 following an investigation and extensive collaboration with the Oregon Department of Revenue,” McLean said. “In total, it appears that less than 2% of Oregonians using TurboTax this year were affected.” 

McLean said Intuit has taken steps to rectify the situation.

“Upon validation (of the issue), we promptly took steps to update our software and prevent additional impact, while also ruling out more far reaching implications,” McLean said. “Additionally, we promptly initiated a process to notify impacted customers via phone and email, provide a refund of filing fees and assist them in filing an amended return.”

To help make the process easier, McLean said, Intuit is providing impacted Oregonians complimentary assistance from their tax experts to help them quickly file amended state tax returns and that filing fees will automatically be refunded for impacted customers.

“Customer satisfaction is at the core of everything we do,” McLean said. “While we do our best to avoid these types of issues, in the rare instance when this does occur, taking steps to promptly address and remedy the issue for those impacted is standard practice.”

McLean said that Intuit regrets not being able to prevent this error from occurring and that Intuit has always been clear, fair and transparent with its customers.

“We pride ourselves in keeping our customers at the forefront of everything we do,” McLean said. “Trust is critical for our relationship with customers and stakeholders.”

Despite this response, Wyden said that he will remain vigilant to make sure Intuit will follow through with their claims.

“Given this latest chapter in Intuit’s troubled consumer history of failing in this instance to provide accurate information for more than 12,000 Oregon state tax returns, I will watchdog the company’s commitment to make whole all Oregonians who paid for the erroneous TurboTax service,” Wyden said in response to Intuit’s letter. 

Wyden also said that he will continue to press for the expansion of Direct File, the new free tax tool available in some states that lets taxpayers file federal taxes directly with the Internal Revenue Service.

“Given Intuit’s history of deceptive advertising, this is certainly a black eye to their reputation,” Stern said.

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