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Software Glitch Could Cause Errors In Federal Tax Returns

Associated Press

Thousands of computer users with Intuit Inc.’s best-selling tax-preparation programs could end up with many unhappy returns.

The MacInTax Personal 1040 program contains an error that can pop up when used with other software, the company said Wednesday. MacInTax and its counterpart program for IBM-type personal computers, TurboTax, also make calculation errors under certain circumstances.

Intuit, which leads the market for money-management software for personal computer users, said it discovered the bugs two or three weeks ago. It has since fixed them and is telling all registered users how they can get free, corrected versions, which will be shipped beginning Friday.

The company also said it will pay the Internal Revenue Service any penalties stemming from the flaws.

“We have identified some calculation errors in a small number of circumstances and are prepared to make it as easy as possible for any affected user to quickly correct any problem,” Intuit Chairman Scott D. Cook said in a statement.

The problems affect fewer than 1 percent of the users of the programs, the company said. Intuit sold 1.25 million tax-preparation programs for the 1993 tax year but had no figures for the number sold for 1994, according to company spokeswoman Debra Kelley.

Intuit said it had planned to tell customers within a few days about the flaws, as part of a regular update informing them about revisions and possible problems. The company announced the availability of new versions after published reports of the errors.

Such flaws are not that uncommon in software, said David Farina, an analyst with William Blair & Co.

“Intuit has a unique problem. They have a product and they get a short window to push this product through,” he said. “You’re rushing to get something out the door, and errors happen. It’s not as though they can test it through April.”

But some MacInTax users said Intuit should have found the mistake before selling the program. They also said the company should have informed users immediately and not shipped any buggy programs.

“Any simple test would have caught this,” said Bruce Beasley, an Oakland, Calif., sculptor who said he spent hours struggling over his taxes before finding that MacInTax missed more than $8,000 of income. “And this bug would affect the average user.”

Another man said he discovered the flaw in a preliminary version of MacInTax, reported it to the company in late December and was disturbed to find it was in copies the company shipped.

“I gave (Intuit) the information, and apparently it either didn’t get through or they didn’t take it seriously enough,” said the Rev. Peter Danylchuk, a minister in San Mateo, Calif.

Intuit Vice President Bill Harris said early reports of the problem apparently did not filter up to management.

Beasley and Danylchuk said they ran into problems when using MacInTax with Quicken, Intuit’s popular personal finance software. When information was transferred from Quicken to MacInTax, the tax-preparation program drops every 30th entry, they said.