This page contains a single entry from the blog posted on December 20, 2007 4:19 AM. The previous post in this blog was Six-string. The next post in this blog is EPA to states: Back off on CO2. Many more can be found on the main index page or by looking through the archives.

E-mail, Feeds, 'n' Stuff

Thursday, December 20, 2007

TurboTax and the Oregon kicker, Day 4

The exchanges between the makers of TurboTax tax return preparation software and Oregon taxpayers who say that that program improperly donated their state income tax "kicker" refund to the State School Fund have reached an apparent impasse. We blogged about the brouhaha here and here, and today we have just a little more to add.

TurboTax says it can't see how the software could have checked the "Donate Kicker" box on the tax return unless the taxpayer checked that box in one of three places: in the "Interview" conducted by the program, on the "Information Worksheet" that the taxpayer can use instead of the "Interview," or on the tax return form as it appears on the screen.

But several readers of this blog disagree. One wrote:

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.
The fact that this taxpayer filed on paper and now complains about the problem is interesting. The official Oregon Department of Revenue statement about the situation makes it sound as though the issue is limited to those who filed electronically, as opposed to using software but filing a hard copy:
If you e-filed your 2006 tax return and believe your kicker refund was donated to the State School Fund in error because you didn’t check the box to donate your refund, please know that this issue is our highest priority.
Has the DOR somehow determined that hard copy filers could not possibly have a valid complaint?

The DOR notice also asks taxpayers to report "whether you used the online or store-bought version." With TurboTax, as I recall, even if you buy the software on a CD, only the federal return is included -- the software relating to state taxes must be downloaded from a TurboTax website over the internet. One state typically comes free with the federal product, but it's not actually in the box.

In any event, today's bottom line is that this incident has boiled down to a he said-it said over what particular taxpayers actually did while running TurboTax. One reader writes:

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 occurred 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.

Not a very touchy-feely statement.

Just to add some more fuel to this fire, an alert reader who didn't have a problem volunteered to reinstall TurboTax 2006 fresh on his Mac and see what the default setting on the "Donate kicker" box was. He reports:

Attached is a screen grab from a virgin copy of Turbo Tax '06 for the Mac. I did nothing more than open up the copy, which imported my name and other information from my Federal TT '06 return. The screen grab is of the portion of the information sheet showing clearly the box with the kicker refund question on it. Note that the question is present and the box is unchecked, the default condition. I don't have the Windows version to compare, but clearly there is no problem with the Mac version.
Here's his screenshot, with the crucial box at the botom:

What he didn't do -- and if he's reading, I hope he'll do it today -- is go to that "virgin" TurboTax, with that box unchecked, open up Form 40, and show us what the top block of that form looks like on the screen. Finally, print out the form and see what's on the printed version.

At least one commenter suggests that everyone who is complaining either (a) made an operator error or (b) consciously donated the kicker and is now forgetting that fact or lying about it. It's hard for me to accept those explanations. At this stage, there are reportedly more than 3,000 people complaining that TurboTax or other software ate their kicker check. That's a lot of people with bad computer skills, bad memories, or bad enough morals to risk going to jail over a few hundred bucks.

UPDATE, 12/20, 8:16 p.m.: Big news! Here.

Comments (26)

I'd like to briefly respond here.

1) I agree with Jack about this being a real issue. That is clear. I now strongly feel that the Governor's Office should be lobbied hard to invoke/involve the Attorney General. The is a simple matter of independent oversight (the fox should not guard the henhouse so to speak) for the Department of Revenue and the various corporations involved.

2) In response to Mister Tee, in 2001 (based on the 2000 tax year), 6,000 "donation selections" were made. I can't immediately put my hand on the number of filers in 2000.

In 2007 (based on the 2006 tax year), 12,000 individuals obstensibly "donated" their kicker rebate. This is a 100 percent increase and is a bit of a statistical anomaly. Certaintly, some uptick in giving might be expected. However, our population has not doubled and as I understand it there were 1.6 million tax filings in 2000.

For those of you citing that this is not a real issue, please tell the 25% of the 12,000 donors affected. These 3,000 are justifiably "hot" as described by KATU last night.

I forgot one issue and this is regarding my earlier post here at Jack's Blog about perfection. This issue with the kicker is probably the only circumstance in the nation (state or federal) where an amended return cannot be utilized to fix a human or computer-induced error. Perhaps Jack can repost that here along with a link to the earlier strings.

Additionally, if 3,000 or the 12,000 individuals affected feel that their kicker was erroneously donated ($6.7M total), we are talking about$1.7M dollars potentially due to those individuals. The expected average would be $558.

"A record $1.07 billion in kicker checks were issued this year. A typical check is $200 to $500, but the amounts vary widely based on income." - Statesman Journal 12-15-07

Statistics from SJ:

I don't think any of this is simple or obvious. I've just sent Jack multiple screen shots to show what happens with TurboTax 06 for the Mac. There is no way the effect described happens with the Mac version. I've tried every possible permutation and combination and can only get the kicker donated if I explicitly tell it to be donated on the worksheet. The actual Form 40 has no box for the kicker, but if you are observant, you'll notice the differences in the address and ID section of the Form 40. With no kicker, there is no X in the center of right hand side of the section. With the kicker donated, there is an extra X inserted. That's the only difference. If this is the format that Oregon requires, then perhaps a combination of a software error on the server side, or an OCR error for the paper forms would explain it. The Mac version produces what you'd expect in all formats. Hopefully Jack will post the screen shots at his earliest convenience for all to see.

First, I want to thank everyone, especially Bob from Turbo Tax, for the discussion. Our looking at our forms shows that (a) the Information Worksheet is checked not donated, (b) the infamous floating "x" however at the top of the Form 40 is checked (see one of Jack's prior screen shots). The "x" appears in space, near nothing, and completely unlabeled -- something Bob from Turbo Tax admits. Further, if you inadvertently click anywhere near that "x", another unlabeled "x" appears (I hope that doesn't mean that I've sold my daughter or something). My point is this, there is an unintentional and unlabeled way in which the "x" to donate was placed on the form either manually or not. I think it is hard to argue that the "x" on the Form means anything when it is unlabeled and the worksheet shows that the kicker was not donated. Thanks againg to everyone for their comments.

With e-filing, there may be a third party involved beyond the user's software and the state's software. In the past, both the Feds and many states contracted with a third party to translate the electronic filing documents into the appropriate format for the IRS computers and for state computers. Does anyone know whether Oregon still uses a third party provider to receive its electronic returns? That might account for why this converges on several pieces of electronic software. I just can't believe that Intuit, HR Block and TaxAct, to name three, could possibly make the same error. It is too coincidental.

"That's a lot of people with bad computer skills, bad memories, or bad enough morals to risk going to jail over a few hundred bucks." ?????
Could you expound on that comment?

From the Statesman Journal:

GDogg's response is not reasonable. There is no reason to throw the baby out with the bathwater. The software companies certify their electronic transmission policies with the State of Oregon (based on my interviews).

The issue here is really around the supposedly irrevocable aspect of the kicker. Perfection is not reasonable from people or software. We simply need a mechanism to fix issues with returns if they exist. The Federal and all other State governments recognize this. If amendment is not possible, the kicker rebate donation question should not be on the tax form. It is simply too volatile and too easy to make a mistake concerning hard earned dollars.

One other poster previously mentioned 2006 Form 40X (below). It is surprising that no one from the DOR has suggested that route rather than the silly, insecure and unverfied e-mail submission request (including the last four digits of one's social security number). However, I've done this against my better judgement.

My family will be filing a 2006 Form 40X by the end of the week if this is not successfully resolved.

I choose to belief the people who were ripped off. The overwhelming
majority of taxpayers are honest people who want the system to be
transparent, fair and accurate. This illustrates a Department that will
not admit to a mistake, instead claiming, they need a law to reverse a
mistake. I believe they are wrong. They only needed a timely taxpayer
declaration with the explanation that the documents and taxpayer intent
do not agree, and at most, the taxpayer should be asked to file a 2006
Form 40X, captioned with "Protective Claim" to recover the mistake.
Sooner is better than later.

The problem here is the electronic transmission of a tax document cannot
be inspected by the taxpayer. It is a "black box" process.

Because certain spokespeople for the Department of Revenue want to be
arrogant about it, and possibly incur the additional cost of a class
action, most people adversely affected should file 2006 Form 40X as a
“Protective Claim” and explain intent to recover the mistake. Attach a
copy of “MM” correspondence, to illustrate incorrect handling by the
Department and any other reference to “political tax administration” by
the Governor of Oregon or any administrator.

Send correspondence to legislators requesting discipline of state
employees, who will not administer state laws correctly, including
correcting obvious mistakes."

Back to top
View user's profile Send private message

Jack said: At this stage, there are reportedly more than 3,000 people complaining that TurboTax or other software ate their kicker check. That's a lot of people with bad computer skills, bad memories, or bad enough morals to risk going to jail over a few hundred bucks.

It doesn't really surprise me at all. We have people in our office that risk loosing their job by stealing someones lunch out of the refrigerator. I think people think that it is completely safe to blame a computer for just about anything.

It would be interesting if DOR cross referenced the complaints about the "donated" kicker to how the return was filed. Electronic, Paper from software, or standard/manual paper form. I suspect that there are at least a few people that filed manual paper forms that claim they didn't check the box. Of course, it could have been an OCR problem, again "the computer did it", or it could have gotten a smudge on the form by rubbing against something during processing.

We get a lot of reports of system errors that we end up classifying as "WGC" (Wild Goose Chase) because after researching the problem we find that it was caused by the end user. The audit log shows that they changed the value, and then "Force Resubmitted" the item past all the warnings and errors to get it posted into the system. There isn't much risk of jail time for this, but being HIPAA related, if they are doing it fraudulently, then it is a possibility.

I just can't see that multiple software vendors had the same problem, and that it happened to both paper and electronic, which has been reported here, filing, and that it only happened on less than 0.3% of the returns. If it did, those are some really unlucky people.

I wonder if there's any correlation between having used the Interview Mode to populate the tax form and inadvertently having the donate kicker box checked. Personally, I tend to sleepwalk through the Interview after entering the important stuff (i.e. income and deductions), and I really zip through the state part since the important stuff is auto-populated. Luckily, I somehow was paying just enough attention to be able to afford a Wii this Christmas.

Since the state appears to have more money than it knows what to do with, why doesn't the state just take the position that an "amended" return is not a "revocation" and allow taxpayers to file a 40X that accurately expresses their donative intent? They've split hairs finer than that before.

This illustrates a Department that will
not admit to a mistake, instead claiming, they need a law to reverse a

Seth, I really don't see why you're angry at the Dept. of Revenue and not TurboTax. I've yet to see any indication that the state did anything wrong. They received tax returns, either electronically or on paper, with the "donate kicker" box marked. They processed those accordingly. In addition, there appears to be a law that those donations are irrevocable, which means they don't have discretion to just give you your money because you asked for it.

It looks like something went wrong here, but I haven't seen evidence that the state is culpable.

miles writes:

"It looks like something went wrong here, but I haven't seen evidence that the state is culpable"

Yes, something does appear wrong. I'm suspicious of the DOR primarily because the problem isn't limited to Turbo Tax, but affects a small number of users of Tax Cut, TacAct, and MacInTax. Either there are a substantial number of careless people who have checked a box unintentionally, or a bunch of independent software companies collectively screwed up for a small number of poeple, or the central actor in all this, DOR, screwed up processing a small number of returns.

Draw your own conclusions. I haven't seen a shred of evidence that suggests the true source of the problem, but there is a lot of circumtantial evidence that the DOR might be where the problem rests.

I'm not trying to exculpate Intuit or TurboTax. Lord knows, I've had difficulty with that software for years. It is just that the alternatives are worse and so I stick with TurboTax. Last year's processing with the Mac was my best experience yet. The Mac version is very robust and plays well with OS X; I can't say that my experiences with TurboTax and Windows XP was very positive, with the software crashing alarmingly frequently. I never left me with warm, fuzzy feelings about the accuracy of my returns. But, knock wood, I've only be audited twice and both times it was over trivial (to me anyway) matters that could easily be documented. I lost once and it cost me $67, but there was a valid misunderstanding of the code.

So, let's hold off judgement as to the source for awhile. My money is on DOR, but I could easily be persuaded that the source lies elsewhere.

I have not received my kicker check yet and used TaxAct Online. I did not voluntarily donate my refund and my PDF copy of the Oregon tax form does not have the "Donate Kicker" box checked. This needs to get straightened out soon!

Mr. Fearless makes a good point. . . I didn't mean to imply that DOR didn't screw up, only that I have yet to see direct evidence of it. My comment was mostly based on the fact that many of the people who say they didn't check the box admit that the paper version they print out has the box checked. That says to me it's a software problem, not a DOR problem.

Is it possible that some of the 3,000 who complained about not receiving kicker checks are subject to garnishments? There was an article last week on this, if you owe child support or back taxes or fines, your check was seized. It's possible that money was withheld and not donated to the schools fund.

Until there is further guidance from the ODOR, I'm not sure I would run out and file a Form 40X.

From what I can gather, the ODOR would like to help people, but it also has to follow the law, which clearly says that an election to donate the kicker, once made, is irrevocable.

There are also serious policy questions here about whether an election made on a computer can be ignored simply because the taxpayer claims he or she didn't knowingly make it.

The cleanest solution would be for the legislature to give everyone who donated their kicker a few months to change their minds, at least this one time. That won't happen for at least several weeks.

patty writes:

"I have not received my kicker check yet and used TaxAct Online. I did not voluntarily donate my refund and my PDF copy of the Oregon tax form does not have the "Donate Kicker" box checked. This needs to get straightened out soon!"

Do you owe the state money for any reason? Parking tickets, child support, college tuition you didn't pay for some reason? There are lots of reasons why you might not have gotten your kicker refunded. Have you checked with the DOR to find out what the hold up is?

Many of the taxpayers who are complaining received letters thanking them for their donations to the School Fund.

Mrfearless has a great point above me. If you owe the state money for child support, back taxes, parking tickets etc you will not receive a kicker unless the total is more than what you owed the state. I have a friend who is in that position and he was all fired up over this until I let him know about the child support issue. It may not be the issue for everyone with the no kicker check problem, but I bet for a good amount of people it is.

Our reader with the Mac sent a few more screenshots along today (with identifying information whited or blurred out).

The Mac version of TurboTax also has the problem of lack of WYSIWYG. If you chek the "Donate kicker" box, what shows up on the screen in the Form 40 is a mysterious X floating around to the right of one's name and address. There's no label to tell the user what that X means:

The reader also points out that there is no barcode on the form as produced by the Mac version, in contrast to what happens on the PC version.

In the reader's experience, there was no way to get the X on the form without affirmatively checking it. The default was set to not having the box checked.

"The Mac version of TurboTax also has the problem of lack of WYSIWYG"

I'd say it's the exact opposite: it's WYSIWYG. Donate kicker, get an X. No donation, no X.

Don't care if the X is clearly labeled. Know why? NO ONE CHECKS THEIR RETURNS, or they would have noticed this BEFORE they sent them in.

I'm assuming that I will have to pay federal income tax on the kicker that I received. What about those who donated to the school fund? Will they also have to claim the kicker as income and then take a charitable deduction? Does the state School Fund even qualify as a charitable donation?

Posted without comment -


Kicker Information
Oregon Department of Revenue to refund mistakenly donated kickers

Some taxpayers who electronically filed their 2006 personal income tax returns report that their kicker refund was donated by mistake to the State School Fund.

These taxpayers state that they didn’t check the box to donate their refund, even though the tax return we received shows the box checked.

If you didn’t check the box on your tax return to donate your kicker and you received a notice from us saying your kicker was donated to the State School Fund, you may ask for your kicker back by doing all of the following:

1. Make a copy of the front page only of your 2006 Oregon tax return (Form 40S, 40, 40P, or 40N) that shows that you did not check the “donate kicker” box; write "kicker" plainly across the top of the copy of the return.
2. On the back of the tax return copy, write: "I certify that I did not check the box to donate my tax year 2006 kicker to the State School Fund."
3. Sign and legibly print your name, and include the date. If you filed jointly, both spouses must sign and date.
4. Mail the copy of your tax return with the certification statement on the back, along with the letter you receive from the department, to:

Oregon Department of Revenue
PO Box 14600
Salem OR 97309-5049

Please do not e-mail or fax us this information.

Your envelope must be postmarked by February 1, 2008.

We will send your kicker to you within 3-4 weeks from the date we receive your information. If you owe a debt that the state of Oregon collects, your kicker could be smaller than expected.


Please send an email to questions.dor@state.or.us. Write “State School Fund” in the subject line.

You may also call our customer service help line at 1-800-356-4222 (toll free from an Oregon prefix), or 503-378-4988 (outside Oregon or in the Salem area).

Representatives are available Monday through Friday from 7:30-5:00 except on Thursdays when they are unavailable from 9 am-11 am. Due to heavy call volume at this time you may experience extended wait times or busy signals.

**I apologize for the length of the post but after two weeks of law exams I'm still in that mode, one for our dear prof Jack, no less, but here's guts: It's Intuits fault for not following industry best practices regarding code implementation and regression testing and heres why...

I am not ready to dismiss out of hand Intuit's culpability in this case. With the high number of affected user's relative to past years donations (twice as many?)I inclined to think this is an "Easter Egg."

In another life I was a systems analyst, working on enterprise level software with rolling updates. We would occasionally see these Easter Egg's, code that functions as designed though not as intended. The programmers and systems architects would cry bloody murder, "User error!" But the end user was equally as adamant that it was software related. Precisely, the he said - it said situation Jack so aptly described.

What about all the diligent testing? says you. Well, though it helps rule out the more obvious causes, I think the problem is inherent to the code and how variables are initialized. Before I get into initializing variables, let me take a step back.

In these software packages where there are continuous updates, the initial version is banged on pretty hard and is normally rock solid. It's the continuous updates that don't have the time for the regression analysis (testing to achieve not only the desired result, but also to see if the software plays nice with other parts of code) that lay these Eggs. Turbo Tax falls within this realm.

So the out of the box version the Mac user tested doesn't rule out the possibility that Turbo Tax is the proximate cause. Nor does the Intuit VP's testing with the latest version. It is likely an intermediate update that is gumming up the works.

Well obviously, says you. That takes us back to variable initialization. It sounds like somewhere in the code, a variable is not being flushed and or initialized properly.

One of the tell-tale signs of this is the line doesn't always appear. If you don't check to donate the line doesn't even appear on the screen. But, here's the big, BUT the line and box are both printed. Sometimes correctly with a check, other times incorrectly with a check.

This is where it all comes together. My theory is that it's not checking or unchecking the Kicker box that's the issue (those values are passed correctly), rather it is checking another box prior to Kicker box that is then forcing the Kicker box to inherit its attributes, in this case "checked". That's why it's seemingly intermittent

See, when no selection is made, if the variable is not initialized or the previous values flushed, the bucket, ie variable, will inherent whatever was in the bucket the last time it was used.

If last guy to use the toilet doesn't flush the next guy will get whatever was left in the bowl. Alternately, if you flush the toilet before you use it you'll always get fresh water. Please excuse the crass analogy but it was the best I could come up with.

But how is it affecting multiple software platforms? I'd think we need to know the exact number of users not using TurboTax to address that issue. If the problem is inherent to TurboTax, and the world of other uses is insignificant, that could be attributed to people jumping on the band wagon.

Additionally, there's some ambiguity as to how the DOR is defining e-file. Though I don't think it materially affects the analysis. The touchstone is "electronically prepared", irrespective of e-filing. Whether the user printed it out or submitted online is not the issue, rather it involves the software taking the inputs and translating that into either a digital file that is transmitted or a pdf file that is then printed and mailed. Thus, the issue will affect both strict e-filer's as well as those who only submitted paper returns.


I've spent the last 45 years writing software for financial analysis even though that's not what I did for a living. I'm not sure I would agree with your analysis, although the problem of an uninitialized variable certainly could be the culprit here. What troubles me is the fact that we see this problem to varying degrees in all the major consumer-oriented tax software for 2006. Turbo Tax is clearly the market-dominating software and it hardly surprises me that TT has the most affected users. Nevertheless, from the reports I've read on quite a few different newsgroups, blogs, articles, this same problem afflicts users of TaxCut (H&R Block), MacInTax, TaxAct. If Turbo Tax programmers did not perform industry standard regression testing of updates, to what do you attribute the ubiquity of the problem with other software packages. I've worked in an around state government long enough to know that the rapidity with which the DOR succumbed to political pressure implies that they'd rather not have people looking too deeply into their interface with software manufacturers. I suspect that this problem will be fixed and it will go away quietly without any of us knowing precisely where the ultimate blame lies. But I think it strongly suggests that the smoking guns are in Salem, not in San Diego, or Ohio, or any other place where tax software programmers congregate.


I agree with your response. I addressed that in my post by requesting more information.

"...But how is it affecting multiple software platforms? I'd think we need to know the exact number of users not using TurboTax to address that issue. If the problem is inherent to TurboTax, and the world of other uses is insignificant, that could be attributed to people jumping on the band wagon."

I want more information here. Sure it may be affecting multiple platforms, to date I've read TaxCut and TurboTax. You mention a few more. This is where a summary of the facts would be helpful, but if its 2800 TurboTax users affected and 200 other sources, the other sources may be statistically insignificant, irregardless of TurboTaxes market dominant position. True cases of user error.

I not doubting your experience, just looking at the facts.

And did they really succumb or merely provide a resolution that gives the majority of users NO RELIEF. smoke and mirrors. If the taxpayer had the first page with the box unchecked they would be in the predicament in the first place!

I'm sure we can find out through the discovery process if someone ever files suit.

You've been a pretty ardent supporter of Intuit, sorry but I have to ask, who do you work for?

***Sorry should read:

"...wouldn't be in the predicament in the first place!"

Clicky Web Analytics