Intuit on Tax Glitch: We’ll Pay Any Fines : Technology: The company says its staff knew of bugs in the popular TurboTax and MacInTax software.
Intuit, the maker of the nation’s best-selling tax software program, announced Thursday that it will pay Internal Revenue Service interest and penalties for anyone harmed by newly disclosed glitches in the company’s TurboTax and MacInTax tax-preparation programs.
Complete revised versions of the errant software are being made available free of charge both by mail and on several on-line bulletin boards, company officials said.
“We have identified some calculation errors in a small number of circumstances and are prepared to make it as easy as possible for any affected user to quickly correct any problem,” said Scott D. Cook, chairman of the Menlo Park, Calif.-based company.
The errors crop up in only a handful of circumstances, according to Intuit. For example, when taxpayers attempt to transfer tax information into the MacInTax program from other personal finance software programs--including Intuit’s Quicken--they may lose part of the data. An Oakland sculptor, who originally reported the MacInTax errors, said the program drops every 30th entry.
TurboTax and MacInTax may also miscalculate tax liability in these situations:
* The user has disability income and no other income.
* The user is taking business deductions for the use of a newly purchased automobile.
* The user is calculating 1995 estimated tax payments from the company’s estimated-tax work sheet.
* The user is depreciating an asset that is in its final year of depreciable life.
The company believes that only a small number of people will be affected by the glitches.
Although users can download corrected versions from bulletin boards, downloading is likely to take more than an hour, noted Mark Goines, vice president and general manager of Intuit’s personal tax group. Registered owners probably will want to call Intuit and wait for the software to be mailed.
In a detailed mea culpa Thursday morning, Cook said the company’s technical support division had known about several of the errors for weeks--even months. But company trouble-shooters had failed to notify senior management because Intuit usually fixes software glitches in batches so it doesn’t have to send out multiple revisions.
Because tax software has a useful life of just four months, it was a mistake to delay notifying customers, he said.
Indeed, people who purchased TurboTax and MacInTax this year had been griping about errors and delays in receiving pre-ordered copies of the programs for weeks before Intuit’s announcement.
The Intuit bulletin board on the America Online system is jammed with more than 6,000 messages, many complaints about delays and notices that the programs included bugs, said user Stephen Wise, a Downey-based engineer who posted several on-line gripes.
“They gave no indication to the people who were waiting that there was any problem at all,” Wise said.
Minor errors in software programs--tax-related and otherwise--are fairly common. Indeed, in any given week there may be several “patches” posted on software bulletin boards to fix some recently discovered mistake. Intuit has patched a handful of other bugs in these programs in notices posted earlier this year, according to a spokeswoman at America Online.
The company has had an accuracy guarantee for years but is seldom asked to pay up, Cook said. In 1994, it paid out about $15,000 in IRS penalties--roughly a penny per purchaser.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Glitch Fixes
Corrected versions of TurboTax and MacInTax software are easy to get. Options:
* Get a corrected copy by calling (800) 224-0948. If you don’t want to wait, download the software directly from America Online, CompuServe or Intuit’s bulletin board service. This is likely to take more than an hour because of the size of the program.
* If you have already filed your taxes, you could redo your return with the corrected software to determine whether the glitches caused errors. Then you could file a form 1040X and include a note saying that the return is being amended because of an error in your computer software program.
* If you face a tax penalty as the result of errors in the program, send a hard copy of your return and the IRS penalty notice to Intuit, 6330 Nancy Ridge Drive, San Diego, CA 92121.
