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Petitioners believe that software flaws in the Turbotax program
they used to prepare their return caused the erroneous $8,448
contribution carryover deduction.3 Petitioners appear to base
their theory on Commissioner’s Rev. Rul. 85-189, 1985-2 C.B. 341,
which considers the question of who is an “income tax return
preparer” for purposes of section 7701(a)(36). In addition, that
revenue ruling discusses software developers’ potential for
liability under tax return preparer penalty provisions. See
secs. 6107(a), 6695(a).4 Respondent counters that this case does
not involve preparer penalties5 and that the software
manufacturer is not relevant to the resolution of this income tax
deficiency case. Finally, respondent points out that the only
issue we consider is whether petitioners are entitled to an
$8,448 contribution carryover deduction.
Petitioners have not asserted that they are entitled to the
$8,448 contribution deduction. The focus of their argument is
that the software manufacturer should be responsible because of
petitioners’ belief that the deficiency was caused by Turbotax.
3 Procedurally, petitioners amended their petition in an
attempt to interplead the software manufacturer into this income
tax deficiency proceeding. Petitioners also attempted to call an
officer of the software manufacturer as a witness. Ultimately,
petitioners were not permitted to interplead the manufacturer.
4 Respondent did not determine any penalties against
petitioners with respect to their 2001 tax year.
5 If such penalties were in issue, we note that this Court
does not have jurisdiction over them.
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Last modified: May 25, 2011