From The Washington Wire:
The Senate Finance Committee has taken special interest in recent years in tax-preparation software, trying to encourage taxpayers to file electronically. So perhaps it shouldn’t have been surprising that tax software came up at the confirmation hearing for Timothy Geithner, President Barack Obama’s nominee for Treasury secretary.
Geithner has been mired in controversy over his failure to pay certain taxes earlier this decade during his time as an International Monetary Fund official.
Sen. Chuck Grassley, the Finance Committee’s top Republican, ran through a long list of questions about Geithner’s tax decisions. Geithner said he filed his own taxes in 2001 and 2002.
“Did you use software to prepare your 2001 and 2002 tax returns?” Grassley asked
“I did,” Geithner said.
“Which brand did you use?” Grassley asked.
Geithner, chuckling, appeared resistant at first. “I’ll answer that question, sir, but I want to say these are my responsibility, not the tax software’s responsibility.”
Then he got to the point: “But I used TurboTax to prepare my returns.”
Asked whether the software prompted him to report income and pay self-employment taxes on his IMF income, Geithner said, “Not to my recollection.”
It would’ve been highly unlikely for off-the-shelf tax software to include provisions for IMF workers’ highly unusual tax arrangements. And if Geithner failed to feed the proper information into his software, of course, it wouldn’t provide any warnings.
But the word was out. And TurboTax maker Intuit Inc. was forced to respond.
“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.”
Intuit shares rose 71 cents today to $23.49, or 3.1% on a day the Nasdaq composite index rose 4.6%. The stock took a noticeable drop after Geithner made his remarks just before 11 a.m., but that move appears to track a dip in the broader market.
