Intuit glitch leads to mistaken mega-tax refunds

Intuit's software erroneously promised some Ohioans "grossly inflated" tax refunds due to a glitch

By , IDG News Service |  Software, intuit, TurboTax

Most U.S. residents would be happy to get a few thousand dollars back from the Internal Revenue Service at tax time. But a snafu in some Intuit software recently resulted in a number of Ohio residents receiving letters indicating that eye-popping sums were en route -- in one reported case, a cool $200 million.

The bug befell Intuit's ProSeries and Turbo Tax software and involved the process by which taxpayers submit requests for a direct deposit of their refunds, Ohio Department of Taxation spokesman Gary Gudmundson said via e-mail.

Intuit worked with the state of Ohio to resolve the problem, spokeswoman Julie Miller said via e-mail Tuesday.

An incorrectly formatted data field in the TurboTax product "affected a small number of customers -- only those returns filed with TurboTax between Jan. 21-24, 2011 and which indicated direct deposit," she wrote. "We immediately fixed the error so no additional filers were affected." Only TurboTax was involved, according to Miller.

The glitch "in no way affects the accuracy of the customer's return or their true refund amount," Miller added. "We regret any inconvenience this may have caused our customers."

The Sandusky Register newspaper in Ohio reported last week that 9,700 residents received letters "promising grossly inflated refunds," although the exact number of taxpayers affected by the Intuit bug is in dispute. An Ohio official said 6,400 Intuit returns were affected, while Intuit said about 4,800 customers were impacted.

Now would have been no time for Ohio to be cutting excessive tax-refund checks, given the state's economic woes.

Gov. John Kasich released a 2012-2013 spending plan on Tuesday that includes drastic cuts meant to close a reported $8 billion budget gap.

Meanwhile, U.S. residents have until April 18 to file their federal income taxes. "Taxpayers will have until Monday, April 18 to file their 2010 tax returns and pay any tax due because Emancipation Day, a holiday observed in the District of Columbia, falls this year on Friday, April 15," according to the Internal Revenue Service. Intuit competes with a burgeoning array of tax-preparation software services, such as TaxAct and H&R Block At Home.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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