We’re The Real Tax Attorneys.

Available 24 hrs / 7 Days A Week

Is TurboTax Audit Defense Worth It? The Honest Review

Table of Contents
    Add a header to begin generating the table of contents

    Each year, over 200 million Americans file their tax returns in hopes they won’t have to pay a large tax bill or in hopes that they will receive a significant return. To ensure that you receive the return you deserve or to ensure that you don’t end up paying more than you owe, you will want to make sure you file your return as accurately as you can.

    If you don’t, there is a high chance the IRS will audit your return. Household tax preparation software services, such as TurboTax, come with audit protection services. To learn more about this service and if it is even worth purchasing, check out our guide below. We will cover all you need to know about TurboTax Audit Defense and other alternatives that may better suit your situation. 

    What Is Turbo Tax?

    TurboTax is an American household favorite when it comes to filing your annual tax return. You can use several different editions, but the most common one is the TurboTax Free Edition. 

    Turbo Tax-Free Edition

    As the name states, the free edition of TurboTax is entirely free. This covers federal and state filing. This edition is excellent if you have a reasonably simple tax return. Those with simple returns typically have a W2 from a job and not many, if not any, deductions. 

    If your situation is more complicated than claiming the standard deductions or having children, you may want to contact a tax professional for more assistance.

    What Is Turbo Tax Audit Defense?

    As mentioned earlier, there are different editions and added services that you can pay for. One of those additions is TurboTax Audit Defense. TurboTax Audit Defense provides you with an audit defense if the IRS ever tries to audit your return

    If you get audited, TurboTax will get a TurboTax professional to defend you and assist you with the audit. You can purchase this addition through the TurboTax MAX option, which costs you $60. If TurboTax cannot connect you with a professional, they will refund you the $60.

    What Is Included in the TurboTax Max Service?

    In addition to the audit defense, the MAX service includes loss insurance, identity theft monitoring, and restoration help. If the Internal Revenue System pulls your return for an audit, TurboTax’s representative will walk you through the process from the beginning to the end. Many clients reported that they enjoyed this service, whereas others didn’t have the same experience. 

    Is Turbo Tax Audit Defense Worth It?

    In general, the TurboTax Audit Defense addition is not necessarily worth it for several different reasons. The first reason why adding this to your tax return is not worth it is because the IRS is unlikely to audit your return. On average, one in every 333 taxpayers gets audited. Percentage-wise, this is only about 0.3% of the total population of taxpayers. 

    Less Likely to Get Audited When Using TurboTax

    Another reason why getting TurboTax Audit Defense may not be worth it is that those who use TurboTax tend to have more straightforward returns than others. However, if you run a business and have complicated investments, you should reach out to a tax attorney to help you file your taxes. 

    As mentioned earlier, those who use TurboTax typically only file their 1099s, W2s, and claim the standard tax deductions. As long as you report your information accurately, you are less likely to receive an audit letter in the mail. Even if the IRS audits you, it will most likely be something as small as a math error or something minor. 

    What’s Included in TurboTax Audit Defense?

    Although TurboTax Audit Defense helps handle communication with the IRS about the audit, there are a few limitations and exclusions listed in the certificate. The main service offered by TurboTax is having someone from their company send out letters to the IRS. This can be very beneficial, especially if you aren’t too familiar with tax codes, and communicating with the IRS can be quite tiresome. 

    What TurboTax Audit Defense includes:

    • Negotiation with the IRS through appeals 
    • Pre-litigation appeals review prior to tax court trial
    • Develops a strategy with you before communicating on your behalf

    If the IRS and your assigned tax professional can come to a settlement, they won’t finalize anything until you approve it. Again, this service may not be necessary, especially if you have a reasonably simple return. 

    What Is Not Covered under TurboTax Audit Defense

    TurboTax Audit Defense may sound like a safety blanket to protect you from an audit, but it is essential to remember that there are some limitations and exclusions that come with this service. For example, the TaxAudit service does not provide legal representation in court if your case goes to Tax Court.

    TaxAudit service limitations:

    • Does not provide legal help for any alleged or actual criminal or civil fraud
    • Does not amend local, federal, or state returns
    • No collection notices assistance for undefended audits
    • Does not organize records, do bookkeeping, or reconcile checkbooks

    If the audit requires additional work that costs money because you reported your audit late or you don’t cooperate, you will have to come out of pocket for these expenses. Many clients refer to this service as having a basic insurance policy on your simple return. 

    Pros of TurboTax Audit Defense

    Based on the information provided, it seems like this service offers more cons than pros. For example, an advantage of using TurboTax Audit Defense is that you have a piece of mind that you have some form of assistance in case the IRS audits your return. TurboTax can help you negotiate and correspond with documents sent from the IRS. 

    Cons of TurboTax Audit Defense

    Based on the very minimal protection you receive, the price is expensive. As mentioned throughout the article, audits are rare, specifically for those with relatively easy tax returns. If the IRS audits your return and accuses you of any civil or criminal fraud, TurboTax won’t be able to do much on your behalf. 

    Should I Hire an Experienced Tax Attorney?

    Suppose you are a business owner filing your own tax return. In that case, you may want to seek the opinion of an experienced tax attorney, especially if you aren’t taking the standard deduction. As a business owner, you most likely already have recorded many of your purchases to use as a deductible expense. 

    Business costs, such as internet, rent, new equipment, and more, can quickly exceed the acceptable standard deduction amount. When you file your return via an online service such as TurboTax, you can list out your deductions, but it doesn’t tell you how to prove them.

    It also doesn’t properly advise you on what constitutes as a deduction for your type of business. Tax attorneys have more knowledge about the different types of deductions you can take for your specific industry. They will be able to let you know how to prove these expenses and what other deductions you qualify for. 

    Bookkeeping Services

    Unless you hired an accountant to handle your taxes for the year, you most likely are the only person handling your bookkeeping tasks. Unfortunately, if you are the only person doing the bookkeeping, there is a huge chance you could cause a massive error. If you inaccurately report your information, it could trigger the IRS to do an audit

    Other possible punishments you could get for inaccurate documentation:

    • Paying too little or too many taxes
    • Harsh penalties and fines

    Online tax software won’t let you know that you put in the information wrong. It assumes you know what you’re inputting. When you work with a reputable tax attorney, they can walk you through all of your possible deductions to reduce your tax liability. If there are any inaccuracies, they will handle that on your behalf before you send in your return to the IRS. 

    Factors in Your Investments

    Even though TurboTax has the capabilities to process information about your investments, investing itself is a confusing concept. How can you be sure that you’re reporting all the correct data or if you’re missing any forms or other reports?

    The software won’t be able to help you properly identify your tax basis if it is not already reported on your investment documents. If you have any employee stock options or restricted stock, a tax attorney can also help you factor that information into your return. Some deductions come with your employee stock options you may or may not be aware of. 

    Taxes Are Complicated

    Let’s be honest; filing your taxes can become complicated and confusing fast unless you have a straightforward tax return. In addition to running a business, there are other situations that can further complicate your tax liability. 

    Other factors to take into consideration:

    • Marriage
    • Rental properties
    • Buying a house
    • Having children
    • Foreign earned income

    Again, TurboTax has the ability to analyze these significant changes and how they affect your taxes, but it won’t correct you if you input something wrong. The ownness of ensuring your return is accurate falls upon you. Not only will a tax professional help you sort through these changes and how they affect your tax liability, but they can also help you plan for the future. 

    You Don’t Have Time

    Even if you have a simple tax return, it can take time to get through the entire process. Although TurboTax does help speed up the process a bit, you still have to dedicate time to sitting and inputting your information. Even if you can pull data from the previous year, you still have to sit there and verify that everything checks out. 

    Preparing taxes is second nature for your tax attorney. They understand the complicated tax laws and how to prepare appropriately and file your return on your behalf. 

    How to Find the Right Tax Attorney

    Several different tax attorneys are available near you, so it can be easy to get overwhelmed by the many options available. To ensure that you find the right attorney for your needs, you should first take a look at their reviews to see what other clients said about their services.

    How was their communication? What did clients like most about working with them? Of course, the best way to see if someone is a good fit for you is to meet with them for an initial consultation. 

    Check for Proper Licensure

    It is important to note that tax attorneys have law degrees and are accredited by the state they practice in. Tax preparers and CPAs each have their own requirements and licenses they have to carry, and this is the same for tax attorneys. You can double-check your attorney’s credentials against your state’s bar association. 

    Compare Fees

    Tax attorneys are on the higher end of the pay scale when it comes to employing a tax professional, but this is for a good reason. As mentioned earlier, tax attorneys have to go through years of school and obtain their licensure through your state’s bar association.

    Their expertise in tax law is unmatched, and they can properly analyze your situation, especially if you have a complicated tax situation. Don’t be afraid to ask the attorney upfront about their pay schedule. The most experienced and well-sought-out attorneys are upfront with their costs, and they won’t beat around the bush. 

    File Your Taxes Right

    TurboTax is a household tax preparing software that works best for those who have simple returns and minimal deductions. To protect your return from an audit, you have the option to purchase their TurboTax Audit Defense.

    It has some benefits, but several limitations could render your purchase useless. Unless you plan on only claiming the standard deductions and you have a W2 from an employer, you may want to reach out to an experienced tax attorney for more information.

    Contact us if you need help with an audit or preparing your returns to ensure they don’t get audited. Our experienced tax attorneys have years of experience handling audits and other IRS issues. 

    Share The Knowledge! 😊


    Get More Knowledge

    Ready to secure your financial future? Subscribe Today For Tax Knowledge Tomorrow


    Search Our Tax Knowledge Base

    Generic filters

    Need Tax Help? See If You Qualify For an IRS Hardship Program

    IRS trouble can be frustrating and intimidating. Schedule a consultation to find out if you qualify for an IRS hardship program – it only takes a few minutes!

    How Can we help?

    Don’t worry, our consultations are 100% Confidential & 100% Free