Just a quick note to let you know the Audit Defense service offered by TurboTax in recent years is probably not worth the price. It’s run by a company called TaxResources, Inc., and they say they’ll represent you to the IRS in case you should have any problems with your return, for the low price of only $39.95.
Someone close to me got to find out exactly what they give you in return for that $39.95 “peace-of mind” fee, when an irregularity popped up on their tax return. They’d made an accounting error, found it out, wanted to report it to the IRS on their own, but contacted these folks because, after all, they did pay for the service.
In the meantime, the IRS also found out about the error and contacted them. This is where the Audit Defense service should have shined. Instead, my contact got the run-around. The Audit Defense team weren’t willing to help them in a timely fashion, didn’t want to contact the IRS on their behalf like they should have done, and only ended up helping them — if you might call what they got help — after several written requests. In the end, my contact lost out on precious time, got extra stress they didn’t need, and will need to pay the IRS additional penalties.
It looks to me like the Audit Defense people failed on three of their basic promises: they didn’t step in right away to deal with the IRS, they didn’t handle the entire tax audit, and they didn’t keep IRS penalties as low as possible.
The name of the employee who “helped” my contact with their IRS audit was Joe Schricker, and the company’s name again is TaxResources, Inc. The service is advertised as Audit Defense on TurboTax, and my advice to you is not to get it.
Agree all the way. They gave me a FELON to be my representative. I only found out when the IRS refused to deal with him.
Brian, that takes the cake. Wow.
Thanks for the post. TurboTax strikes again. Pretty scammy of them to offer such a useless service and then not deliver.
Oh, gee. NOW I find this. We’ve been paying them for years, and just paid again. Will definitely have to rethink it for 2012.
Exactly what Julie said! :-/
I too had a horrendous experience with audit defense. Very incompetent representative in my opinion by the name of Ed Matta out of Santa Maria. After he had me do extensive research to get documents together that they “needed”, I wasted hours of my time before he said he was mistaken and they were irrelevant. He forgot to take files to the audit, lost files, and when I complained about the service I was receiving he said it wasn’t a big deal that he “only wasted my time” and that I should be satisfied that he “eventually” gave me accurate information. He said the tax law is technical and I should understand that. He was very apathetic, very incompetent and a waste of time and money. I let him go and am handling the audit on my own. Stay clear!
A few thoughts:
1. I’ve never bought or used TT’s Audit Defense. I’m thinking about it this year, however, insofar as we just spent scores of hours in 2011 complying with an IRS audit for previous year taxes. Not an experience I’d ever want to go through again — at least alone. Hence the search for objective “reviews” of the service.
2. With all due respect, almost all the complaints posted online about TT’s Audit Defense don’t actually pertain to audits. They’re about people getting bills from the IRS for past due taxes, etc. Apples and oranges. An IRS audit is a particular animal, and I doubt the kinds of services many people are griping about even fall within TT’s terms of service.
3. I don’t doubt TT will unwittingly hire a crooked rep from time to time. The odds favor it. But it’s about how TT deals with the mistake that matters.
4. I also don’t doubt that TT will unwittingly hire a crappy rep from time to time. But know this: the IRS is also full of crappy auditors. The woman who audited our return in 2011 knew less about the tax code than did me and my wife (we’re both attorneys with a reasonable law-school background in taxes.) Luckily, this IRS lady made almost as many errors in our favor as she did against us. In the end, we decided a bush in the hand was worth two in the bush and signed off on her findings. But had it gone worse, we would have faced many thousands in legal fees to start a frustrating — and quite possibly hopeless — battle the IRS.
5. The only sure way to end all this is to simplify the tax code significantly. But with morons like Herm Cain and Steve Forbes carrying the tax simplification banner, and with the multi-billion dollar tax preparation industry (including folks like TurboTax) and the one-percenters who benefit enormously from the current tax code aligned against tax reform … well, don’t hold your breath.
Several years ago a communication breakdown led to a major tax demand etc. by IRS. I was liquidating a foreign shares portfolio and the proceeds were notified to the IRS. But I was not notified and the IRS treated the sale as net not gross. I contacted Audit Defense and they did me proud. Sorted it all out over a few weeks and ended up reducing taxes owed and clearing me with IRS.
thank you, almost bought this. I lost a W2 from someone who paid me and wanted to be safe. Instead I requested the W2 again and will amend my tax return once i receive it. If I receive a W2 from a company and dont report it does the gov automatically know? Kinda wondering if I have a month to add it.
Jared, you can’t seriously be thinking that the govt doesn’t receive all of your W2 forms. Of course they do. That is the foundational data point.
I have to say that I can’t imagine a company charging 39 dollars and giving you top notch legal representation. I’m looking at my LLC attorneys last phone call for me, of .70 and the charge was $105. There simply is no way they can represent every client with full attention. I don’t see it. By the way, informative blog.
They’re not representing everyone. The point of charging a lot of people $39.95 is so they can give their full attention to the few that actually get audited.
When I signed off on my 2011 return, I signed up for Audit Defense. With in 10 days I received a letter from the IRS for 3 years of tax audit. Seems the IRS thinks I owe them $27,000. Consider I am an unemployed special education teacher and I barely make that much. I was wondering if this third party is getting some kind of kick back. Since I paid $59.00 for the Audit Defense for the 2011 tax year, they told me I would need another $3000 or so to represent me for 09 and 10. I asked what I would get for that and they were very vague in their answer. My question to all of you is: Do I pay the extra money or do I take that money and go to a real live tax lawyer, which would probably cost the same.
I had a terrible experience with Audit Defense. After dragging out the process for over a year and letting it progress from stage to stage, their accountant told me, “That’s it, I won’t be representing you anymore. Good luck in tax court,” and just walked away.Then I had to take my file to a private accountant who charged me thousands of dollars to undo the damage the Audit Defense accountant did. If that’s not a scam, what is?