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The following
piece was taken from the November 16, 2006
"WebCPA" ...
Washington (Nov.
15, 2006) - The U.S. Tax Court has again
rejected a taxpayer’s attempt to pin the blame
for their negligent tax return on tax
preparation software.
On Nov. 9, the court handed down an opinion
finding against a petition filed in New Jersey
by Henry R. Broderick.
According to court records, the petitioner
blamed defects in his income tax return on
software that he claimed to use in preparing the
Form 1040 return. Broderick, who owns a
consulting firm, understated his taxable income
by more than $50,000, leaving him with no tax on
his 2002 return. However, the court said the
blame rested with taxpayer negligence -- which
includes failure by the taxpayer to keep
adequate books and records or substantiate line
items properly.
According to the court, “Such a program is
only an aid for preparation of a return and
depends on careful entry of accurate
information, which petitioner manifestly failed
to do. Petitioner admits that he has the
education to prepare and review his income tax
return. ... Accordingly, petitioner’s use of
software in preparing his return does not
constitute reasonable cause for the errors in
his return.”
The court rejected a similar "TurboTax
defense" in February. The full opinion for
the Broderick case is available here.
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