TurboTax face-off: Treasury nominee vs. Intuit

Correction at 9 a.m. PST: Tim Geithner's nomination status has been corrected. His nomination has not come up for a full Senate vote yet.

This was originally posted at ZDNet's Between the Lines.

Treasury Secretary nominee Tim Geithner--the man who hopes to be entrusted with overseeing the Internal Revenue Service and a remaining $350 billion in bailout funds--apparently isn't so smooth when it comes to Intuit's TurboTax.

His mention of TurboTax as he tried to explain away back taxes during a confirmation hearing last week highlights two common problems in IT: users vs. software, and the "garbage in, garbage out" conundrum.

Last week, a flurry of news reports noted Geithner's comments about TurboTax. As background, he was grilled about failing to pay more than $34,000 in payroll taxes earlier this decade.

Geithner said he "mistakenly believed" he was meeting his tax obligations. When asked which tax preparation software he used, Geithner noted that the taxes were his responsibility, "but I used TurboTax to prepare my returns."

This incident--see The Wall Street Journal's live blog and Senate Finance Committee video (TurboTax mention comes at the 48-minute mark on the January 21 video)--highlights the never-ending user error vs. software tug-of-war in IT.

Was your application screwy or did you fail to input data? Were Geithner's tax problems the result of TurboTax's failure to flag potential issues--like payroll taxes--or Geithner's failure to cough up critical information.

Intuit was clear about where it stood. In a statement, Intuit said:

Each year, millions of Americans use TurboTax to accurately prepare and file their federal and state tax returns. 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.

Advantage Intuit. No one watching Geithner's testimony is likely to buy the blame-the-software routine. Clearly, this fiasco is a "garbage in, garbage out" issue. Geithner didn't provide the necessary data.

The larger question is whether a guy who wrestles with TurboTax should realistically be expected to oversee the IRS and fork over $350 billion in bailout money. I'll leave that for you to decide since that answer goes well beyond the scope of my blog. I'd hate to add yet another IT problem--scope creep--to this post.

In the end, Geithner will probably be confirmed, but his standing has certainly been diminished.