TurboTax denies responsibility for Geithner's mistakes


If you're an executive at Intuit, which makes a substantial chunk of change filing people's tax returns, you probably don't want to anger the future head of the Treasury--which, of course, contains the Internal Revenue Service, the ultimate consumer of your output.  On the other hand, you don't want to imply that your product is capable of screwing up peoples' tax returns.

Witness the verbal gymnastics of Dan Maurer, Intuit SVP, as he tries to absolve both Tim Geithner and his firm from the mistakes on Geithner's return:

"Each year, millions of Americans use TurboTax to accurately prepare and file their federal and state tax returns," Dan Maurer, senior vice president and general manager of TurboTax, said in a statement late this afternoon. "The software helps taxpayers report their income and find the deductions and credits they're entitled to claim. TurboTax, and all software and in-person tax preparation services, base their calculations on the information users provide when completing their returns. TurboTax also has built-in error-checking tools that routinely catch common taxpayer mistakes. Federal law and our own privacy policy prohibit us from discussing specifics of any customer's return."

Perhaps Obama's first act as president should be to introduce the reflexive into English in order to help business handle the increasing number of such delicate situations.  One of the great charms of a language like Spanish is that no one ever screws anything up.  Problems can be dismissed with an airy "se rompió"--it broke itself.    The equivalent constructions in English, such as "mistakes were made", lack the elegant ubiquity.

That said, the fault can hardly lie with TuboTax, which cannot be expected to have a separate section to cover the special tax difficulties of a few thousand IMF employees out of the millions of returns it handles every year. 

The National Review is skeptical that this can have been an honest mistake.  On the one hand, whatever the difficulties of our tax system, I find it hard to imagine how anyone could confuse 1099 income with W-2 income.  On the other hand, I've never worked for the IMF, and I don't know what sort of forms they hand people.  And having spent sixteen hours doing my taxes last year--me, with no mortgage or depreciating assets, much less exotic tax-free financial instruments--I'm not willing to say that it couldn't have been simple human error. 

So who to blame, in the absence of a convenient reflexive?  My candidate is America's absurdly inefficient tax code.  Tax simplification is one of the most economically productive reforms we could make.  But there are just too many people getting tax credits who will fight fiercely to defend them.  And Obama seems to share the mania for "targeted tax credits" aka opaque and inefficient subsidies.

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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