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Wednesday, December 19, 2007

More on TurboTax and the Oregon kicker refund

Reports that tax preparation software such as TurboTax mistakenly donated taxpayers' substantial Oregon "kicker" refund checks to the State School Fund have really piqued our interest. We posted about the story yesterday, and a TurboTax vice president even responded to comments on this blog last night. But obviously, despite his protestations, there is something wrong. It seems unlikely that hundreds of Oregonians who used that program all screwed this up.

My family used TurboTax to file our tax returns last year, and our kicker check came through fine. But in the interests of investigative blogging, we thought we'd retrace our steps and try to figure out where the program may have gone wrong for other folks. We still don't have much of a clue, but backtracking helped us see where the problems might lie.

First, since different taxpayers use TurboTax in vastly different ways, let's recap our situation. We don't file electronically, for a number of reasons. For one thing, we don't like making life easier for the government, which e-filing definitely does. And we'd never post our financial data on someone else's server (like that of Intuit, the maker of TurboTax). To us, that's just inviting trouble. Therefore, we download TurboTax onto our home PC, prepare our returns on our own machine, print them out, sign them manually, and mail them in to the revenuers via U.S. Mail. We pay by check. Since our tax situation is of average to above-average complexity, we file the long form, Oregon Form 40. We are Oregon residents all year, and so we don't use either the nonresident or part-year resident form.

We never get a refund (except belatedly, via the kicker), and so we never file our state return before the week of April 15. And when TurboTax hounds us all through tax filing season to let it update various files on our computer via the internet (which can be time-consuming), we always let it do so. Thus, by the time we filed our 2006 return, our version of the TurboTax Oregon software was as up-to-date as we could get it before the filing deadline.

Since I'm a tax lawyer, I don't bother being "interviewed" by TurboTax. I believe I'm familiar enough with the tax law and with the program (I've used it for more than a decade) that I can bypass the interview and go straight to filling out the forms myself. You don't have to enter every single line on the tax return form -- TurboTax remembers you from last year, entering in all your basic information from past returns. And if the same number belongs in different places on different forms, then once you fill it in once in the right spot, TurboTax places it everywhere else it needs to go. Beautiful. Most of the state return is driven by data from the federal return, and so there's not a whole lot to do once you get down to the state return.

But there are a few things to watch out for.

One of the basic forms in the Oregon software is something called the "Information Worksheet," and that's where a line appeared last spring for those who wanted to donate any kicker to the School Fund. It's the first line in "Part VI - Other Information":

If TurboTax was set up correctly, by checking that box, one would have expected that the box on line 7e of the Oregon long-form tax return would be checked. Here's the official version of that line on a standard Oregon income tax return form:

As you can see from the first image above, we didn't check the box on TurboTax, and so that box should remain unchecked on the state tax return that TurboTax spits out. But on the form it shows on the screen when you tell it open Form 40, not only was the box not checked -- the box didn't appear at all:

Just for kicks, last night we went back into our fully functional version of TurboTax and checked the box on the information sheet, just to see what would happen on the form TurboTax produced. And so we checked the box and saved the file. When we opened the return form, at that point there should have been a notation that we were donating our kicker check. But in fact, line 7e still didn't appear:

And so it would seem that even if we had wanted to donate our kicker check (which we didn't), we may not have been able to do it on TurboTax.

Ah, but here's where the rub comes in: When you have the program actually print out your return, what you get on the resulting paper form is not what you see in the screen image. When we sent our version of the return with the "Donate" box checked, here's what actually came out of the printer:

This is exactly the situation that an outraged reader complained about here yesterday: What you saw on the screen wasn't what printed out. Bad move, TurboTax!

But other taxpayers who didn't get their kickers have been heard to complain that they never checked a "Donate" box anywhere -- including on the "Information Worksheet." In that case, the printed version should have left the box unchecked. Our backtracking can't answer why that didn't happen, but it does suggest that TurboTax wasn't handling line 7e of Form 40 as competently as it could have. Form 40S, the resident short form, also was missing line 7e on the version of the form that displayed on the screen.

To make matters more curious, both the nonresident and part-year resident forms on TurboTax did have the 7e box on the versions that displayed on the screen. Here, for example, is the nonresident form, Form 40N, as it appears on the screen in TurboTax (and the part-year resident form, Form 40P, also appears complete in this regard):

I think the problem may actually have to do with that barcode that gets printed out on Form 40 and 40S. That barcode doesn't appear on the screen version of the form, but it does show up on the printed version. On the other hand, the telltale checked "Donate" box that shows up on the printed version but not on the screen version may be the cause of some taxpayers' woes.

We couldn't tell TurboTax to file an electronic return at this point, and so we're not sure what happens when you do that. But at least with paper filing, what shows up on the printed return form does not match what shows up on that form on the screen. (And neither is exactly the same as the official paper form issued by the state.)

Whatever the cause of the screwup was, our hearts go out to those poor taxpayers who didn't get their kickers when they were expecting them. Merry Christmas from TurboTax and the Department of Revenue. Media reports suggest that the School Fund doesn't have to give back the money, and maybe it isn't even legally allowed to do so, at this point. An election to donate the kicker, they're saying, is irrevocable.

At least if your tax return is prepared by a human being, that certainly appears to be the case. Here's a ruling by the Oregon Tax Court on that very issue. Maybe the case would come out differently if a computer program causes the mistake, but I wouldn't bet on it. Perhaps the taxpayers could get somewhere by showing that the Department of Revenue was involved in reviewing, or even developing, the barcode feature of the TurboTax return forms. That would be at least a partially public, as opposed to a completely private, mistake.

In any event, the makers of the software in question (and TurboTax may not be the only one) are no doubt calling their liability insurance carriers right about now. If indeed there was a mistake, it could get rather spendy.

UPDATE, 12/20, 5:00 a.m.: More on this saga here.

Comments (44)

Well, fwiw, I used Turbo Tax and filed electronically in late February. I vaguely remember seeing a question when I went through the interview process about donating a potential kicker and opted not to. And we got our kicker check in the mail just fine. (We do get refunds, which is why we file early and do so electronically; it's for our benefit to get our refund back as quickly as possible via direct deposit.)I'm pretty mystified by what I've been reading about the missing kickers, and I look forward to someone figuring it all out.

I have very mixed feelings about the kicker. I really don't think the money should be sent back to taxpayers just because economic forecasters were cautious in their predictions of future tax revenues. But otoh, like everybody else, I've got bills to pay that the money will come in very handy for. I wish I were donating it; I admire people who do donate it, whether to the state or a charity. I can't manage that this year, but I would happily vote for an intiative to do away with the ridiculous kickers.

To summarize:

The TurboTax information worksheet (the "input page") and the interview method ("interrogatory based data input") each contain a box or question which requires the filer to choose to donate their kicker.

Personal data must be provided to TurboTax via the input page or the interrogatory based data input. If you used either method, you were given the opportunity to donate or not donate the kicker.

If your personal data was carried over from the previous year, it may have carried over your kicker election, which would be visible on the screen, but not on the printed page.

Jack, is this an accurate summary of your test?

Jack... My research and conclusions differ from what you present here. Let me explain. (And by the way, I will send you a separate email with pictures. Unfortunately, I could not figure out how to include pictures in my comments.)

The screen image of Form 40 DOES display an "X" in the field reserved for the Kicker Rebate if you elect the Kicker Rebate. Unfortunately, because all computer generated Oregon forms must comply with rules different from forms printed out and manually completed, the screen image of the form truncates many descriptions and eliminates some design elements (like boxes and frames) so it is not intuitively obvious what the X is for. However, since the vast majority of our customers use the Interview for preparing their return, they would see the interview question and associated form on screen. Nevertheless, even if you are just entering information directly to the form (very dangerous since many tax forms do not contain the fields necessary to properly compute all tax calculations), the field for the Kicker Rebate is blank (as expected).

I do agree with you, however, that the TurboTax printed form shows the X when the Kicker Rebate is selected (and does not show an X when not selected). Just as one would expect. Even if the Kicker Rebate question is ignored, TurboTax defaults to No. Again, this is what one would want.

As I noted in my previous comment, we have done extensive research into this issue and cannot find any case where the output is anything other than what one would expect. Our objective is not to deflect blame from us or anyone else, but rather try to understand why some taxpayers who thought they were getting the Kicker Rebate as a refund instead had the refund contributed to the school fund. We continue to work with customers and the OR Dept of Revenue to get to root cause.

Thanks for giving me the opportunity to respond. And by the way, please pass on my contact information to any TurboTax customer who wishes to escalate their issue. You have my contact information.

Bob Meighan
VP, TurboTax

Mister Tee... The Kicker Rebate was not an option for the preceding tax year (TY05) so there would not have been any information to carryover to TY06.

Bob Meighan
VP, TurboTax

Bob - thanks for commenting on here. It's very helpful.

Can you tell us of any contacts via any method anyone in your company had with any employee of the Oregon Department of Revenue, any Member or staff person of the Oregon Legislature, Governor Ted Kulongoski or any member of his staff, or any representative of any non-profit organization or labor union employee or representative regarding how TurboTax should treat Kicker rebates prior to December 1, 2007?

Thanks again.

I've now read some comments in some of the various tax newsgroups that a few who used the H & R Block Tax Cut program experienced this issue as well. To me, that suggests one of two things: 1) user error or 2) a late update to these programs that people missed. One of the challenges of using a computer-based method of tax returns is the pattern of constant updates to forms and computational engines that come out with regularity during the tax filing season. Most of these updates seem to disappear after February 28, but the operating assumption of the software companies (and the taxing entities) is that you shouldn't really file before the last of the updates came out. I've already gotten the 2007 Turbo Tax box from Costco (Small Business Premier edition). Since installing it, the software has been updated 3 times and more than 700 files changed. And Congress still hasn't finalized the AMT matter. I expect thousands more changes before this is done.

Like Jack, we don't get refunds and our taxes tend to be a trifle complex. Unlike Jack, we do file electronically, primarily because it is more convenient for me. I could care less about government convenience. (It also ends up costing about the same by the time you factor in the cost of deskjet ink cartridges, paper, postal costs including methods that guarantee that I get a certificate of mailing and a certificate of receipt, gas to travel a fair distance to the nearest post office, time standing in line at the post office, etc).

But, as I've said before, I examine the version being electronically sent before I press the send button. While Oregon's format is vastly different in the electronic version than the paper version, it really isn't that hard to decode if you have a printed copy of the return (as you would mail it) sitting in front of you. If there were a box checked in the electronically formatted return that wasn't checked on the paper version, you'd be able to identify it quickly (or at least I would).

In any case, it would be interesting to know whether the people affected by this problem filed early (before 2/28) or after. This might be the issue common to all filers, regardless of method, and might also explain why users of other programs may also have reported this problem.

FWIW, I used the Mac version of TurboTax last year for the first time.

If they had built in a captcha challenge would it have been enough to prove intent to contribute? If you had to repeat the captcha challenge three times, to make triply sure your intent, would it have been construed as a political statement opposing the donation?

Does one get a deduction on their taxable income for the donation, just as with any donation to a (so-called) non-profit?

If the state does not honor, belatedly, the present expression of intent of the "donor" then TurboTax could just leave out all optional gift type things from all future generations of it's product. Would that itself cause the folks that want to offer voluntary donations ON A COMPULSORY TAX FORM to respond by rejecting forms originated by TurboTax; on the premise that it was too political to leave off the optional donation lines?

SUPPORT THE CHILDREN! (held captive by non-children)

Bob from Turbo do you explain that the Donate Kicker box IS NOT CHECKED on the Worksheet, does not show up on the electronic screen form at all and is checked on the PDF or printed forms? If it was really the data entered by the taxpayer, as you suggest, the box on the Worksheet would be checked. It isn't on ours.

Mr. Meighan. I respectfully disagree with your assertions and suggest that you and your company are being less than truthful about upgrades to the system that were made approaching April 16, 2007. The second part of Jack's test is the key -- the one he wasn't able to perform. If you DID NOT select the donate kicker option, as our worksheet shows we did not, not only is there no existence of that non-election on line 7e on the state form because line 7e is nonexistent, but the printed sheet shows the "Donate Kicker" box as checked. And this is the rub. Let's say I examine either the worksheet or the view of the Form 40 on the computer prior to e-filing. At that point, there is no problem because either, (a) I've looked at the worksheet and the box isn't checked, or (b) I've looked at the form and there is no line 7e so I'm good to go. Either way, I think I've chosen not to donate it at that point.

As a previous commenter suggested, the error rate for this Kicker must far exceed the error rates in prior years associated with any number of your returns. At first, I thought where there's smoke there is fire. After reviewing our forms last night on our computer I am 100% sure that there is glitch that changed the election.

I read the tax court opinion you posted/linked and it appears the court sought to rely not only on the statute (donation is irrevocable) but also on the nature of "elections." I was hoping you might post your thoughts about the difference between an election and a gift or donation under the law. That is, a gift or donation typically has a legal elemental requirement of donative intent. Apparently an election does not. Does that matter in this mistaken kicker donation situation we have? Should the form or 'check box' description be relabled?

Can I suggest one other thing? Terminology matters. Mr. Meighan keeps referring to the election field as a "Kicker Rebate" selection. That is, in fact, not what the worksheet says nor what line 7e asks you, and it makes a world of difference.

The worksheet and line 7e ask "do you want to donate the Kicker?" If instead the field election, as Mr. Meighan suggests, is being interpreted as "Kicker Rebate?" that results in a FAR different outcome than when I select "no" to the question "Donate Kicker?" If I'm answering "no" to the question "donate kicker" and you're interpreting it as "no" to the question "Kicker Rebate?" we've got a SERIOUS problem -- and by we I mean YOU!

Well, now I don't feel so bad.

One news site said "About 12,000 people gave a total of $6.7 million..." Given the population of Oregon is over 3.7 million(about 23% are under 18), that means about 0.4% donated their kicker.

12,000 seems like an awfully small number of people donating their kicker if this was a pervasive problem with TurboTax. Bob can you tell us how many copies of TurboTax Oregon were sold for 2006? How about how many returns were filed electronically? (Since I assume there is no way to know how many paper Oregon returns were filed using TurboTax.)

I used a boxed version TurboTax, from Costco, and helped file 4 tax returns, and all 4 got their kicker check. (We all answered NO to the donation question in the interview.)

I suspect that either people thought the kicker would be small, so who cares, they just weren't paying attention, or they read the question wrong. Though, it isn't good that 7e doesn't clearly show up on the screen in some cases.

What would be acceptable as proof to show that the person in no way selected the option themselves, and that they are just changing their minds now that they know how much money was involved? If they filed via paper, they actually signed the paper that was checked to donate it.

You can think whatever you want about the people who are claiming this mistake, but Jack did a great job of boiling down the problem and showing that, in fact, it is more than people who have simply changed their minds. Most people who are bringing this problem forward are doing so because they are shocked that they never received a Kicker check. As for proof of whether the option was selected, how about the Information Worksheet the person filled out showing that the "donate" box is not checked? Why is that not enough?

I understand that the DOR is caught in the middle here, but Turbo Tax is not. If they admit that there was an update made to the software after a date certain it will go a long way to showing the DOR that those who filed prior to that date did not elect to donate their Kicker.

It seems to me that the Dept. of Revenue should change the form to allow taxpayers to donate a percentage of the kicker or up to a maximum of $___. That's the way some of the retirement contribution forms are set up where I work, where you may not know what your year end total income might be at the time of election.
And if it is a "donation",(as the form apparently says) why is it binding if the party making it has no idea at the time how much it might be. If history is a guide and the average kicker has been $100, but this year it is $400, can the taxpayer be said to have a donative intent in April of the preceeding year to donate $400 when he or she has no idea, based upon history, that the kicker would be so large. The donation ends up being 4 times larger than intended.
If the Or. Dept of Revenue does not do something to kick some of this back to the disgruntled taxpayers who may or may not have had donative intent, but didn't know it would be so much, who is going to make the election to donate in the future. In the long term it might actually hurt the school fund.

Ken: Jack did a great job of boiling down the problem and showing that, in fact, it is more than people who have simply changed their minds.

I don't think Jack showed that at all, I didn't see that Jack said he saw that the paper form was checked when the Information Worksheet wasn't.

As for proof of whether the option was selected, how about the Information Worksheet the person filled out showing that the "donate" box is not checked? Why is that not enough?

Because anyone can just change the Information Worksheet now, and claim that is how it always was. Now if they used TurboTax online (the web version) and TT can look at their files and see that the box isn't checked, and that it hasn't been modified since the return was filed, then that would suffice. But from what Bob has said, they have looked at their files and the Information Worksheet had it checked on everyone that gave them permission to check their files. (Date and Time stamps mean nothing on files, as you could just change the date/time on your PC, and then change it in TurboTax and save it.)

People who filed electronically would have a better chance of challenging this, as they may have never seen it on the form, which Jack did show, but if they filed on paper, and the paper had the Donate box checked, they signed it saying everything was correct right?

Michael, you're right. Jack did not show that people who did not check the box on the information worksheet had the box checked on the paper PDF with the barcode. But I can show that is exactly what ocurred to the return my wife prepared using Turbo Tax. And no, we haven't changed anything. And yes, we e-filed. And yes, it was early -- which gets back to my prior point that there was an update at some point that corrected the glitch.

If we donated it voluntarily (which we did not) or through our own error (which we did not), I can accept that. That is not the case, however, and there will be some kind of resolution one way or the other whether it comes from the state or from Turbo Tax/Intuit.


Did you use the web version, a downloaded version, or a store purchased CD version?

If TurboTax screwed it up, they should have to pay the kicker to the people, under their "100% accuracy guarantee."

But, unless they admit to it, which they haven't yet from what I have seen, it would take a lawsuit and discovery of their source code and patches, assuming that they kept all the versions and changes, and not just the most current version.

The only way I can think of to independently verify that this could happen, would be to install the version that came on the CD to a new computer, and not let it install any updates, and try to replicate it. If I can find my CD, I might give that a try.

Even then, unless the web version was used, you still have the problem of proving that you didn't check it. In reality the whole thing is just a big mess now.

Michael wrote:

"The only way I can think of to independently verify that this could happen, would be to install the version that came on the CD to a new computer, and not let it install any updates, and try to replicate it. If I can find my CD, I might give that a try."

That won't do it. The state version isn't on the CD. You have to download it and, if that is possible, you'll probably get only the latest version.

I forgot about that... I was thinking about when I got a CD for each...

So now we are back to Intuit being the only party that could verify for sure what happened.

The screen image of Form 40 DOES display an "X" in the field reserved for the Kicker Rebate if you elect the Kicker Rebate. Unfortunately, because all computer generated Oregon forms must comply with rules different from forms printed out and manually completed, the screen image of the form truncates many descriptions and eliminates some design elements (like boxes and frames) so it is not intuitively obvious what the X is for.

Come on, sir. You are pulling my leg. An X floating around in space doesn't tell your user anything.

If the Form 40 was set up the way Form 40N is, the reader would see the X in a box that explained what it is.

Here's the X that Meighan is telling us about. I've whited out most of my identifying information, but even with all my info on the form, that X just sits out in space on the form on the screen. There is no way for a user to tell what it's about:

If TurboTax is hiding behind that X, they might as well just pay people the kickers that they missed.

We will check that area of the Form, but it still doesn't explain why the X shows up even when the Information Worksheet shows that "donate" was not checked.

While we're looking at screenshots, here's one that Meighan sent me this morning. It shows what TurboTax looks like in the interview mode on the kicker donation issue:

Ken, in my case, that X did not show up except when I had checked the box on the Information Worksheet. My point is, though, that even a diligent taxpayer checking the form super-carefully on the screen would not have a clue what that X meant.

The problem I am identifying here is one of a lack of WYSIWYG -- what you see is what you get. Like Intuit, however, I have been unable to cause TurboTax to produce that X unless I myself checked the donation box elsewhere in the program.

Thanks. Seen it. We answered "no" which is exemplified by the fact that our Information Worksheet does not have an "X" in the box. And yet ...

You are the winning case, then. If I were you, I would be sure to leave TurboTax exactly as it is and call Bob Meighan at Intuit. I'll send you his phone number off blog. Keep us posted.

John Fairplay... To my knowledge, we have not had any specific conversations with OR regarding the Kicker Refund prior to 1/1/07. The instructions and forms are sufficient for us to incorporate them into the TurboTax product. However, OR does provide us with test cases that include Kicker Refund responses (Yes and No) so we (OR and TurboTax) can test the accuracy of the electronically filed tax return. We received acceptance from OR prior to the beginning of the season.

mrfearless47... Updates are a necessity in this business. Taxpayers want something in their hands before January 1 to do year end planning. While many forms are not yet final (Congress did not pass AMT relief until today!), we provide a One-click Update that allows customers to easily update TurboTax with the latest forms, calculations, and instructions. We do that as often as necessary to ensure everyone has the latest releases.

As for product updates, we made no changes to the Kicker Refund calculations for the year. They are the same from start to finish. Plus, we have not seen any pattern to the issue that would suggest there is a problem with early filers vs later filers.

Kim... You can check the box on the onscreen form to override the worksheet. But, I have not yet seen any case where marking an X in the worksheet or answering the Interview question results in an incorrect result on the actual tax form. We have tested this extensively and have had other customers test it and in every case, the outcome is exactly what you would expect (and I believe Jack acknowledges this in a later post). By the way, make sure you read my post that responds to Jack's post.

Ken... The only way to get an X on the actual tax form without a corresponding X on the worksheet would to manually enter the X on the tax form (the box is to the right of the address area and is not specifically labeled). There is no way around it and I encourage you to try it.

DB... I fully agree that to contribute all or nothing and not know in advance what the amount will be is just too scary. Unfortunately, that is how the Kicker Refund works.

Ken... My apology. I have been using Rebate when perhaps I should have been saying Refund. All of the TurboTax screens and forms are consistent in the use of Refund. It's just that the press has been referring to these refunds as "rebates" and I was just trying to use the same language they were using.

Michael... The onscreen form is not like the actual printed tax form available from the OR web site because computer prepared forms have different requirements. For example, they MUST meet OR specifications for scanning, etc. So, by OR Dpt of Rev rules they do look different than the forms found in the library, in your tax booklets, or from the OR web site. Based on data I have (caveat, this may not be totally accurate), we efiled over 500,000 returns to OR.

Jack... I appreciate your reviewing again the program and arriving at the conclusion that you cannot get an incorrect result. And by the way, the actual form is not intended to be the input mechanism (even though you could if you knew what to check). Customers almost always follow the Interview or use the worksheet that shows simultaneously with the Interview question for the Kicker Refund.

I have done my best to respond objectively to the concerns raised here. Like you, we are searching for answers and the truth. There is nothing Intuit or I would do to compromise the trust we have earned over the 25 years we have been offering TurboTax. I do take exception to those who suggest we are hiding the truth. We have made mistakes in the past and will make them in the future. At least we have the decency and integrity to acknowledge our mistakes and do right by the customer.

I will be setting up a form to capture specific customer information from those who have been affected by the Kicker Refund issue. We hope this will give us and OR better information to help troubleshoot this issue. I will post the link when it is available.

I hope this information helps.

Bob Meighan
VP, TurboTax

Given that there were only around 12,000 "donations" and TT e-filed at least 500,000 forms, that would mean less than 2.4% could possibly even have had a problem. It would actually we significantly less than that, as the numbers Bob supplied wouldn't include paper filed returns. And we know that people have complained that other tax preparation software did the same thing. So IF there was a problem it hit a very small portion of people. Not to mention that some people probably really did check the box on purpose.

Being a software developer I know how difficult it is to make a "bullet-proof" application. It once took me over 2 hours of pounding on one of my applications to replicate how a user, repeatedly, managed to enter data that violated all the rules and integrity checks. (I am sure they knew exactly what they were doing, but refused to share the information, as it allowed them to do something they weren't supposed to do.)

It certainly is possible that there is some combination of things you can do to get TurboTax to incorrectly check the box, and I am sure that Intuit would really like to take a look at Ken's file. (Especially if the Information sheet still shows nothing, and when you print a PDF it still shows it being checked.)

Just for clarification, I know that you can place an X on the form that does not flow backward to the worksheet or interview. That is by design since the flow of calculations and numbers go from the interview to the worksheet to the actual form. Stated another way, if I place a number (or X) in the interview, it will flow to the worksheet and then on to the form. If I skip the interview and place a number (or X) on the worksheet, it will flow to the form. All by design.

What I'm trying to uncover is how one can use the Interview or the worksheet and get a Kicker Refund result on the actual electronic form that is different than what is indicated on the worksheet or interview. You can help me by identifying if this is possible. We have not been able to recreate this scenario.

Thanks for your help.
Bob Meighan
VP, TurboTax

Kudos to Bob Meighan and Intuit for engaging in dialogue. They could have easily sought refuge behind the "no comment" wall of corporate counsel.

Even if I knew I was blameless, I'm not sure I would venture into the blogosphere without a fireproof public relations firm.

I can't believe that anyone in their right kind would intentionally check boxes on a form that were not labeled as anything. If somehow the unlabeled box was checked on the form, but not in the interview or on the worksheet, it had to be a mistake.

Is tax preparer carelessness a mistake?

How can you distinguish between input errors and a software glitch which apparently impacted less than half of one percent of the tax filings (assuming every donation was in error).

Perhaps donor's remorse only kicks in when you realize your neighbors all got hundreds of dollars of "found" money, while you donated yours (eight months ago!) without paying much attention.

As gas prices pass the $3.00/gallon mark, perhaps some of us are feeling less charitable these days.

Just curious, but is the focus only on these user tax software programs (Tax Cut, Turbo Tax, etc.)?

Who's to say the problem isn't at the server side, which receives and processes these request. Anyone have insight as to what the State uses?

Perhaps donor's remorse only kicks in

There are too many complaints here for this to be nothing but dishonest Oregonians lying about whether or not they voluntarily contributed their kicker.

Props to Bob from Intuit for being involved. Does seem like something is wrong, but the possibility of this same thing happening to TaxCut users makes me wonder if the State has any responsibility here.

Also, someone mentioned it only happened to lest than 2.5% or something like that.

May seem like a small number, but that is a HUGE margin of error. When it comes to financial things like taxes, I'd hope for a 0.025% error rate or less.

I'd like to respond to Michael. I was involved with these discussions early, that is to say Friday, with the President of the Senate, the Department of Revenue, the AG's office and the Office of the Governor. I continue to interact with those parties as well as reporters from the Statesman Journal, The Oregonian, and KATU. I am doing my best to help drive this matter to a quick, decisive and positive resolution.

Also see -
(extensive postings associated with the Loew article)

(consolidates other news coverage)

I was also fortunate to speak with Mr. Bob Meighan from Intuit (TurboTax Division) via phone. I would like to echo the sentiments voiced earlier here in this blog that he and his company have exhibited exceptional integrity thus far in engaging with us. He is a sharp, careful, and thoughtful person and I believe he is working very closely with the DOR to deal with this issue. Let's continue to treat him and Intuit/TurboTax with respect and care.

One of the key points in the conversation he and I had today was around the topic of "perfection". I raised this and simply expanded on my ideas. I have suggested he and I keep the remainder of the conversation off the record just to maintain an easy open dialogue.
My issues are similar to those voiced by Michael (also a software person).

As a 10 year veteran of the enterprise software space (ex. SAP, Oracle and JD Edwards) doing both configuration and program management, I can attest that perfection from humans (that is either developers or tax filers) or programs (created by human beings and tested using testing protocols and User Acceptance Tests designed by human beings), is not a reasonable expectation.

We can seek to minimize errors by either people (user error or developer errors) or programs (via extensive testing unit, regression and integration testing), but we will never eliminate it.

My personal issue is that an error occurred and my wife and I did not wish to donate our kicker as I've noted in other forums. As Bob and I discussed, what we should all be focused on, rather than blame, is on a successful resolution of this matter to both satisfy the affected taxpayers and to allow the continued, generally well-deserved, confidence from users in electronic tax filing software.

The challenge is that because the kicker rebate donation is supposed to be irrevocable, it implies thatperfection is required in order to avoid errors as they cannot be remedied. As you will all recognize, this is surely a recipe for disaster, especially concerning hard earned dollars. This should resonate for all (pro or anti-kicker) as it is merely a matter of principle. The State or Oregon (as the Internal Revenue Service does) needs to allow individuals to file amended returns that will allow them to address all and any issues on their returns, including erroneously donated kickers (whether from user error or a possible software malfunctions).

I also advocate for a more significant dialogue in the interview around the kicker double-checking with individuals that they really do wish to donate the kicker and the potential magnitude (perhaps based on a warning about the average size of the last kicker issued to individuals). I also think a % donation or a fixed amount would highlight the significance of the decision for all taxpayers and potential donors.

Thank your posting's to Jack's extensive and influential blog. However, I hope you will each place pressure on the Department of Revenue, the Governor's Office and the Office of the Attorney General to get this matter resolved.

Affected "donors" should not have to send an insecure e-mail to the DOR with the last four digits of their Social Security numbers and other personal data. A secure form should have been created right away that would have sent an acknowledgment of receipt. Additionally, the AG should be overseeing the investigation at the DOR and requesting that a letter is immediately sent out to all 12,000 potential donors involved to provide the site for the form and to query the population as to any issues they may have had. Not everyone is as proactive as the heads on this forum.

I'm afraid that a large segment of the affected subset of the 12,000 (now over 3,000) may be older individuals far less tech savvy than those on this blog and may have given up hope that their kicker issue could be resolved. I only hope that the recent coverage by the Statesman Journal, The Oregonian, The Register-Guard, The Bend Bulletin, KATU and a MSNBC affiliate will get the word out loud and clear.

I hope things get resolved before Christmas as suggested by the DOR. Ms. Rosemary Hardin is in a difficult place as the spokesperson for the DOR. In fact she looked pained today on the KATU interview. If the DOR handles this matter with objectivity and integrity, I am confident the matter will be resolved in a positive manner.

In short, perfection is not attainable and we should not allow for the design of a system (tax submittal system for the state that is) that does not allow for the correction of errors.


P.S. - I can be reached directly at

Jack Weaver writes:

"Who's to say the problem isn't at the server side, which receives and processes these request. Anyone have insight as to what the State uses?"

I have no idea what software the state uses on the server side, but the notion that there is a problem there conflicts with the data. If there were a systematic problem in the server side software, don't you think many more people would have been bitten?

Also, the problem isn't limited to people who filed electronically. As I understand it, people who printed their returns and mailed them in were also affected. I've checked my copy of TT06 and the OR version of '06. If people followed the interview, the interview does indeed default to "NO" in answer to the question about donating the "kicker" to the Common School Fund. So even if one missed the question altogether, the default answer is, as it should be, NO. My printed state return also shows "NO" to the answer, and my electronic return obviously stated NO as I received my kicker rebate about 8 days ago.

The fact that I've seen complaints about TurboTax '06, Tax Cut '06, MacInTax '06, and TaxAct '06 makes me suspect user error more than anything else. I don't see how a user could "prove" what his/her intent was at this late date. Is there really any strong, corroborated evidence that the software (any or all of the programs) is at fault.

I can easily follow all the different screenshots, but they don't, in my opinion, capture the state of the process at the time the individual returns were filed. That detail is crucial in verifying whether a problem exists and how it might have come about.

Until we can gather the class of users affected (3,000 or 12,000 donors) together, we will not be able to systematically discern the issues here and the prevailing common themes of error. Invariably, there may be some who will try to recant their decision, but I believe that most of those who decided to actively donate to the State School Fund, will stand behind their decision.

I am seeking all parties affected to join the Oregon Kicker Yahoo Group - so that we can perform just the analysis you suggest. Unfortunately, neither the DOR or the various news teams have been willing to publish that site.

I've read through most of the comments above. I did not e-file, so my situation is probably most similar to Ken's.

This return was prepared using TurboTax Deluxe, the store bought version. After completing taxes, I created a PDF from the software and printed paper forms from the PDF. Filed paper copies by US mail and did not receive kicker check. I did not notice that “Donate Kicker” box had an X in it before mailing forms. I had NOT put an X in that box when I was working in the software, so I assumed my kicker was not being donated.

These two screenshots were taken from opening up my TurboTax Deluxe software file and also the PDF is generated. I did not make ANY changes. This is how it looked as I prepared to file on 4/8/07.

I could not get them uploaded but emailed them to Jack in hopes he could add them below this comment.


The DOR website links this problem to "e-filing". Is that where the problem ostensibly lies? If that's the case, then the possibility of a server-side error is increased, especially if problems are also occurring with individuals who filed using other tax preparation software. There is no way that three or four different tax software programs can produce the same problem; it would have to be on the DOR side.

Is there any certainty that this problem is limited to e-filers? (I e-filed using TTax '06 for the Mac and didn't have a problem).


2,500 complaints out of more than 500,000 software based tax returns sounds like human error. Especially where hundreds of dollars of windfall tax refunds (per taxpayer) are concerned. In the case of a software or e-filing glitch, the error rate would be higher than half of one percent.

Remember when sudden acceleration was all the rage? First it was Audi's fault, then it spread to Jaguars and Ford Crown Victorias. Now it's happening in all sorts of cars...It's six times more likely to occur when the driver is over the age of 70. And they usually say they had firmly depressed the brake pedal (to no avail), not the gas pedal.

But the NHTSA can't find anything wrong with the cars following mechanical inspection. Here's a good website on automotive forensics for those who are interested... Notably automotive brakes are generally designed to stop a car even if the gas pedal is floored at the same time.

Even Sheriff Joe Arpaio was attacked by his own Crown Vic in the parking lot of an Osco Drug store.

2,500 complaints out of more than 500,000 software based tax returns sounds like human error.

Not to me. I do not believe that 2,500 people (if that's the correct number) checked "Donate my kicker" and now are lying about it in a situation that could land them in jail. In fact, I wouldn't believe it if you said it was 250. We've already shown that the software does not adequately display the check mark in question. What else doesn't it do?

What else doesn't it do?

I noted that it didn't properly carry over from the Federal return the 1,500 state tax credit for the Prius we bought in 2006. Since I caught it and manually corrected it on the printed form, I didn't bother complaining. But perhaps now it is material here, considering everything the situation with the kicker.


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