Wyden demands Intuit help Oregon TurboTax users who were misled into overpaying state taxes

WASHINGTON (KTVZ) – Senator Ron Wyden demanded Thursday that Intuit make whole all Oregon taxpayers whose recent use of the company’s TurboTax product incorrectly led them to overpay their state tax.

In a letter to Intuit CEO Sasan Goodarzi, Wyden cited a recent report that a TurboTax software error opted Oregon taxpayers into claiming the standard deduction on their state taxes when itemizing would have produced a larger refund. Wyden noted the Oregon Department of Revenue notified Intuit of the problem in early April, but the company failed to acknowledge it until a few days before the April 15 filing deadline.

“Fixing this error will require identifying all affected Oregonians, notifying them, and ensuring they can be made whole,” wrote Wyden, Chair of the Senate Finance Committee. “In part because of TurboTax’s various guarantees and market share, Oregonians who overpaid due to TurboTax’s error likely assumed the software opted them into claiming state standard deduction to minimize their taxes. That assumption was wrong.”

“And because the vast majority of taxpayers understandably dread filing season and avoid thinking about taxes after it ends, many of those affected will not learn on their own that they overpaid,” Wyden wrote. “Intuit must inform them and help them get the full tax refunds they are entitled to receive.”

Wyden has been a longtime critic of deceptive advertising by Intuit and a strong supporter of Direct File, the new free tax tool available in some states to let taxpayers file federal taxes directly with the IRS.

“TurboTax encourages customers to ‘File with confidence, knowing your tax return is backed by America’s #1 tax preparation provider. Its “Maximum Refund Guarantee” states that ‘[i]f you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid,’’’ Wyden wrote. “Intuit has a history of deceptive advertising, but I expect it to make good on this guarantee.”

Wyden asked Intuit to answer the following questions by May 15 to help the Finance Committee understand the extent of its problems in Oregon and address them:

• When and how did Intuit first learn of the problem, what steps did it take to investigate, and what steps did it take to mitigate the problem after it was confirmed?
• How does Intuit test TurboTax to identify and eliminate errors in its software that would cause taxpayers to over or underpay?
• How did this quality control process fail in this case involving Oregon’s state return?
• How will Intuit prevent this or other similar problems from reoccurring?
• How many Oregon customers were or may have been affected in this case?
• Has Intuit investigated whether its software made a similar error in other states?
• What steps will Intuit take to inform affected customers that they overpaid state tax due to a TurboTax error? 
• Will Intuit help affected taxpayers file amended returns? How so, and at what cost?
• If Oregonians discover they overpaid due to the TurboTax error, what steps will Intuit require they take to obtain a refund for the cost of filing a state return?
• Will Intuit proactively send refunds of the TurboTax purchase price to customers who were affected?

The entire letter is here.