Intuit glitch leads to mistaken mega-tax refunds

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

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 US$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."

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 customers received letters "promising grossly inflated refunds." Ohio officials could not immediately confirm that figure.

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 15 to file their income taxes. 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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Tags business issuesapplicationsH&R BlockIntuitJohn KasichsoftwareFinancial / tax

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