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2013 tax filing season gets crazier for some H&R Block, TurboTax customers

When we thought things were finally on track with the Internal Revenue Service’s final document updates, the craziness that is this year continues with problems for some TurboTax and H&R Block customers.

Let’s start with federal tax problems for folks claiming the American Opportunity education tax credit.

Filings that involved education credits already were delayed until Feb. 14 while the Internal Revenue Service updated the form and its computer system to synch with the American Taxpayer Relief Act changes enacted on Jan. 2.

Then just a week later, problems with some education credit claims popped up. The IRS announced that folks were not answering questions on Form 8863 that deal with the applying student’s years of education and drug convictions, both issues that could invalidate a claim for the American Opportunity Tax Credit.

Complaints started showing up on the Internet, including H&R Block’s own “The Community” forum.

The snafu is impacting about 10 percent of the 6.6 million tax returns containing Form 8863, IRS spokeswoman Michelle Eldridge told MarketWatch. That’s more than 600,000 returns.

Affected taxpayers may have to wait six more weeks before they receive their refunds, she says, adding that the IRS is hoping to reduce that wait time.

TurboTax troubles: So let’s head up to The Land of 10,000 Lakes, where some TurboTax clients are just as upset with that software’s state tax filing program.

The Minnesota Department of Revenue has warned residents “not to use Intuit (TurboTax, Lacerte, Intuit online, ProSeries) to file your Minnesota taxes electronically or on paper. Intuit has discovered multiple issues with their products. The issues could jeopardize the accuracy of your return or delay your refund.”

The emphasis in the announcement is the state’s and, yes, Minnesota tax officials are not happy. They added that “we find these errors unacceptable. We expect Intuit to correct these problems immediately. If they fail to do so, the department will stop processing returns filed using Intuit.”

So what was the problem and who’s affected?

Intuit spokesperson Miller says there are two issues in the 1040 TurboTax product for Minnesota’s individual filers, one dealing with a $5 general state fund political election designation and one related to the state’s marriage credit.

Intuit estimates that about 10,000 Minnesota customers were affected.

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