Is TurboTax Audit Defense Worth It? The Short Guide To Audit Defense Policies


Audit protection plans, such as TurboTax’s Audit Defense, provide advice and takes care of correspondence with the IRS in the unlikely event you are audited. Most people don’t need this service, but is the peace of mind it buys worth it in your case? We discuss what two tax attorneys, CPAs, and enrolled agents had to say about what Audit Defense offers, what it doesn’t, and how you should prepare for a potential audit.

The short answer is TurboTax’s Audit Defense (or any of the audit defense policies like it) is not worth it for most people. I say that as someone who uses TurboTax every year. I love its design, workflow, and convenient access to CPAs. Of course, TurboTax is also pricier than most other tax preparation companies, but the extra money is well worth it. Paying extra for its Audit Defense feature, not so much.

The long answer is that it depends. The peace of mind of knowing that tax professionals will be there to help if there is an audit may be worth it in some cases. This is particularly true for people concerned about how accurate their income reporting was or if they were a little too aggressive with tax deductions.

Let’s take a deep dive into what TurboTax Audit Defense offers, what it doesn’t include, and how likely you are to need it

Note that other tax preparation companies provide similar audit protection services. Compare the services and prices of multiple providers using SuperMoney’s free comparison tools.

6 Reasons TurboTax Audit Defense is not worth it

Here are six reasons why TurboTax’s Audit Defense may not be worth the cost.

Let’s look at each of those reasons in more detail.

Is TurboTax Max worth it?

The short answer is, “it depends.” It’s like buying insurance. It can be worth it if you use it, but you probably won’t. Turbotax Max is a premium version of the Turbotax software that offers audit defense, identity theft monitoring, loss insurance, restoration help, and priority care with a TurboTax product specialist. Here are some things to consider when deciding whether Turbotax Max is worth it for you:

  • Your tax situation: Turbotax Max is designed for people with more complex tax situations, such as those who own a small business or have significant investments. If you have a relatively simple tax return, you may not need the additional features and support offered by Turbotax Max.
  • The cost: Turbotax Max typically costs more than other versions of the software. If you are on a tight budget, you may want to consider a less expensive version of the software or using a different tax preparation method.
  • The level of support you need: Turbotax Max includes additional support options, such as live on-screen help with a tax expert and the ability to have your tax return reviewed by a tax professional. If you are comfortable preparing your own tax return and do not need this level of support, you may not need to pay for the additional features offered by Turbotax Max.

Whether or not Turbotax Max is worth it for you will depend on your individual circumstances and needs. It may be worth considering if you have a more complex tax situation and are willing to pay for the additional features and support offered by the software.

The IRS is unlikely to audit you

What are the chances of being audited by the IRS in 2021 and needing TurboTax’s Audit Defense? The answer may surprise you. On average, the chances a taxpayer will get audited are just 1 in 333. In other words, the IRS only audits 0.3% of tax returns. And 74% of audits are done by letter. So, most taxpayers never see an IRS agent even if they are unlucky enough to get audited.

The drop in IRS audits is part of a trend that started in 2010. The average taxpayer today is 56% less likely to get audited than in 2010. Despite a record-high number of individual tax returns filed in 2020 (157,195,302), the IRS audited only audited 509,917 thousand of them.

The people who use TurboTax are typically less likely to get audited by the IRS

People who use TurboTax tend to have simpler tax returns, which are even less likely to trigger an audit by the IRS. However, if you run a large business or have a complicated investment portfolio, you should probably have an accountant or tax attorney to help you file your taxes.

Taxpayers who just file 1099s and W-2s and claim the standard deduction are very unlikely to be audited as long as they report their income accurately. Even if you are audited, it will probably be just a math or error or another easy-to-fix issue.

In my view the people most likely to benefit from this plan are also the people least likely to be audited.” Paul Donovan, CPA and attorney

“The truth is that only a very small number of returns filed with the IRS are chosen for an audit. Most notices are due to the failure of a taxpayer return to match information received from third parties by the IRS, such as information reported by an investment broker but not included on the taxpayer’s return,” explains Dr. Steven J. Weil, an enrolled agent and President of RMS Accounting.

On the other hand, if you have reasons for concern about the accuracy of your returns and whether the IRS will agree with your deductions, you probably should look into hiring an enrolled agent, CPA, or tax attorney.

The services provided by TurboTax’s Audit Defense don’t include the most expensive part of dealing with an audit

“Most audit defense policies are a lot like the damage protection you can buy for many retail products. They are very profitable for those who sell them and offer little benefit,” says Dr. Weil.

To determine whether Audit Defense is a good investment, you need to understand what it includes, and more importantly, what it doesn’t cover.

What does TurboTax Audit Defense include?

Here is TurboTax’s description of what it offers, as explained in its user agreement.

Audit Defense: Audit Defense means that TaxAudit will represent you through the completion of any income tax audit for the tax return year identified on the membership certificate during the Period of Membership. Audit notification must be received during the Period of Membership. The Audit Defense Plan is also subject to the limitations and exclusions listed in the membership certificate and this agreement. Audit Defense also includes:

  1. Handling all communications, including letters and/or telephone calls with the IRS or State regarding the audit.
  2. Assigning the Audit Representative(s) to manage your case.
  3. Developing a strategy with you and then meeting or corresponding with the IRS or State on your behalf.
  4. Negotiating with the IRS or State through Appeals and pre-litigation Appeals review prior to trial in Tax Court.
  5. No settlement will be reached with the IRS or State without your final approval and consent.
  6. Two hours of collection assistance is available on request if your covered audit results in additional tax due.

Most audit defense policies are a lot like the damage protection you can buy for many retail products. They are very profitable for those who sell them and offer little benefit,” Dr. Weil, an enrolled agent and President of RMS Accounting

The main service TurboTax Audit Defense offers is advice and help with sending letters to the IRS. This is a valuable service because understanding the tax code and communicating with the IRS is no trivial thing.

However, as David Reischer, Esq. an attorney and CEO of explains: “TurboTax Audit Defense merely guarantees that a certified tax professional will help a person to communicate with the IRS in case of an audit. The service helps a person to draft response letters so that a person can communicate with the audit more efficiently. TurboTax Audit Defense, however, is unnecessary for the person that is already organized and prepared on trheir filing date.”

Nevertheless, TurboTax’s Audit Defense will save you some money if you get audited and need to consult with a tax professional. Remember, though, you are unlikely to get audited, and the services offered by this product are limited to advice and help with drafting letters. So before you decide whether this service is worth it for you, let’s consider what it doesn’t include.

Here is what TurboTax Audit Defense does not cover

It is worth noticing the limitations of this service. Here is what TurboTax’s Audit Defense will not help with (as described in the user agreement):

Audit Defense plan limitations

TaxAudit is dedicated solely to legitimately protecting the rights and assets of our members in the event of an Audit.
The following defines our service limitations:

  • TaxAudit does not provide legal assistance, nor represent our members in Federal or State Court, including Tax Court.
  • TaxAudit does not provide legal assistance in defending issues of civil or criminal fraud, whether actual or alleged.
  • TurboTax’s TaxAudit does not prepare or amend our members’ Federal, State or Local income tax returns.
  • TaxAudit will not reconcile checkbooks, organize records, or do record-keeping or bookkeeping for our members.
  • TaxAudit does not provide assistance for collection notices when we did not defend the Audit. If you have a collection notice from the IRS or State it is not considered an Audit and is not covered by your TaxAudit Audit Defense Membership.
  • TaxAudit is not responsible for the extra work and costs involved if you report your Audit late or you do not cooperate by providing the documentation in a timely manner which results in the auditing agency issuing a Notice of Deficiency (NOD) or the state equivalent. If this occurs, TaxAudit will pass these costs onto the member in the form of a late fee.

Check the small print when considering audit protection policies

Note that the audit defense plan does not include preparing or amending tax returns. Therefore, it will not help with reconciling checkbooks or organizing records either. They also will not help with any work caused by late filing or not providing information in time.

This is common with audit defense policies, as Dr. Weil explains, “While many of these insurance policies cover the cost of a tax professional reviewing and resolving a notice (and some even cover penalties and/or interest assessed by the IRS), what they don’t cover is the additional tax due because of the unreported items. In the event of an audit, they cover representation in front of the IRS; but they do not cover preparation time, which could be the bulk of the billable time if the taxpayer’s records don’t match and support the information that was reported on the return.”

As Paul Donovan, a CPA and attorney for Simplify LLC, explains, “There are several limitations with the product. There is a time limitation. You must receive a notice during the period of membership. There are cooperation requirements. They do not provide legal defense. If you have to go to court, you need a lawyer. They don’t defend fraud issues. It does not cover collection notices. “Extra work” is billed separately. It doesn’t apply if the return is unfiled.

“Large businesses are not covered,” says Donovan. “If you are a partner in a partnership that has received a notice, it may not be covered unless the partnership tax return has a membership. It doesn’t cover anyone under criminal investigation. And, of course, there is a “catchall” reservation of the right to terminate the agreement. In my view, the people most likely to benefit from this plan are also the people least likely to be audited.”

TurboTax’s basic Audit Support is probably good enough for most people

You don’t have to pay extra if all you’re looking for is a tax professional to call if you receive a letter from the IRS or your state’s revenue department. TurboTax offers its Audit Support Guarantee for free. This includes audit guidance from a trained tax professional to help you understand your IRS notice and answer all your audit-related questions. Here is what you get:

  • One-on-one audit guidance from an experienced tax professional.
  • Year-round answers to your audit questions.
  • Assistance with what to expect and how to prepare for the audit.

As of January 1, 2021, TurboTax offers Audit Support Guarantee for federal and state returns prepared in:

  • TurboTax Free File Program
  • TurboTax Free Edition
  • TurboTax Live Basic
  • TurboTax Deluxe
  • TurboTax Live Deluxe
  • TurboTax Premier
  • TurboTax Live Premier
  • TurboTax Self-Employed
  • TurboTax Live Self-Employed
  • TurboTax Home & Business

TurboTax does not offer the services included in Audit Defense

As TurboTax explains in its user agreement, TaxResources, Inc., dba TaxAudit, provides the audit defense services for your tax return. This is not necessarily a bad thing. However, if you are considering Audit Defense because you trust TurboTax’s reputation or like Intuit’s products, remember another company is providing the audit protection plan.

TurboTax Audit Defense is expensive insurance considering the scope of services

Audit Defense service is part of TurboTax’s MAX package, which at the time of publishing this article cost an additional $60. The service also includes other products, such as “Full Identity Restoration, ”Identity Theft Monitoring,” and “Priority Care.”
“TurboTax Audit Defense costs $60 for a basic service with a minimal service guarantee, and this represents a poor value proposition,” says Reischer.

TurboTax Audit Defense costs $60 for a basic service with a minimal service guarantee and this represents a poor value proposition.” David Reischer, Attorney & CEO of LegalAdvice

Audit Defense is the most expensive part of MAX’s package. However, if you buy it as an individual add-on with, you can get it for around $45.

Paying $60 for representation in a tax audit and all those additional services may sound like a bargain to some? So, why would anyone say that it provides little value?

“I look at it as buying a basic insurance policy on your tax return,” says Paul Donovan, a CPA and attorney for Simplify LLC. That is expensive insurance when you consider that it only provides limited coverage in case of an audit. You are effectively paying $60 for an insurance policy that, at most, will save you a few hundred dollars in consulting fees if you are audited — which is unlikely.

What are the pros and cons of getting TurboTax’s Audit Defense?


Here is a list of the benefits and the drawbacks of getting Audit Defense.

  • Peace of mind.
  • It may save you money in consulting fees if you’re audited.
  • Help with negotiating and corresponding with the IRS.
  • Expensive for what you get.
  • Audits are rare, particularly for people with straightforward tax returns.
  • Limited coverage.
  • It does not cover large businesses or users who are under criminal or civil investigation.
  • No legal representation.
  • Does not help with tax penalties, additional tax, or bookkeeping expenses.

What’s the difference between the Audit Support Guarantee and Audit Defense?

Audit Support Guarantee and Audit Defense sound similar, so it is easy to get them confused. TurboTax’s Audit Support is included with all versions of TurboTax at no additional cost, but Audit Defense is an add-on service.

Audit Defense Vs. Audit Support

Compare the features of TurboTax’s Audit Support and Audit Defense features.

Audit Defense
  • Optional, add-on service.
  • Get full audit representation by a licensed tax professional, including representation in front of the IRS.
  • Available through MAX Defend and Restore (TurboTax Online) or as a standalone service (TurboTax desktop software).
  • Must be purchased when you file your taxes.
Audit Support
  • Included with all versions of TurboTax.
  • If you get an audit notice, get one-on-one audit guidance from a trained tax professional.
  • Year-round answers to your audit questions.
  • Assistance with what to expect and how to prepare for an audit.

The main difference between these products is the level of dedicated help you will receive. Notice that TurboTax’s Audit Support provides one-on-one audit guidance from a trained professional and helps with preparing for an audit. Audit Defense, on the other hand, provides full audit representation before the IRS. However, you may find that Audit Support provides much of the help and peace of mind you get from Audit Defense without the additional cost.

FAQ about audit defense policies

Tax-preparation services offer audit defense services that promise to support you if you ever face a state or IRS audit. As explained above, these services are not always worth their cost. Here are the answers to some of the most frequently asked questions about audit defense policies in general and TurboTax’s Audit Defense in particular. Note that other tax preparation services provide similar audit protection. Compare services and prices using SuperMoney’s free comparison tools.

Will TurboTax help with an audit?

Yes, TurboTax does provide help with audits. However, the help you receive will also depend on whether you paid extra for TurboTax’s Audit Defense. Also, the level of support TurboTax you will receive may not be what you expect. See above for a detailed review of what this service offers.

Is TurboTax Audit Defense good?

TurboTax Audit Defense is certainly not bad. Whether it provides good value is another thing altogether. Most people are better off investing their time and money in organizing their paperwork and ensuring their tax return is filed accurately than paying for audit defense policies.

Should I pay for audit protection?

Probably not. Of course, there isn’t a one-answer-fits-all to this, but if you are using an online service like TurboTax, your return is probably pretty easy. Audits are very rare, and in most cases, don’t require expert knowledge to handle. If you lie about your income or exaggerate your tax deductions, you need more help than an audit defense policy. If your financial and tax situation is such that you are likely to be audited or could easily make a mistake that could mean huge changes in your tax liability, then you should probably hire a tax accountant.
What can you do to prepare for a tax audit?

The best investment to prepare for a future audit is to ensure you have the documentation or proof to back the numbers you entered in your tax return.

As Reischer explains, “A person that purchases the Turbotax Audit Defense should realize that the service cannot provide a defense for the tax filer where one does not exist. It is incumbent upon the tax filer to be organized when filing, and no audit defense can absolve a person from liability for an erroneous tax filing.”

So how should you prepare for an audit?

Spend time organizing the documents you will need to support your claims in an audit, or hire an accountant or tax professional to do it for you.

Reischer recommends organizing the following documents by month and year so they are easily accessible and immediately available if requested:

  • Receipts and bills.
  • Canceled checks.
  • Legal documents.
  • Loan agreements.
  • Business or expense logs.
  • Travel-related paperwork.
  • Medical bills.
  • Employment documents and investment statements.

Why is Turbotax charging me?

Turbotax charges for its services. That’s their business model. The fees for using Turbotax vary depending on the specific product or service being purchased. Some possible reasons for being charged by Turbotax include:

  • Using a paid version of Turbotax to file your taxes: Turbotax no longer offers a free version of its software. However, it offers several different paid versions, which come with varying levels of features and support. If you are using one of these paid versions to file your taxes, you will be charged a fee for the service.
  • Filing additional tax forms or schedules: Turbotax may charge additional fees for filing certain tax forms or schedules that are not included in the base version of the software. For example, you may be charged a fee for filing a self-employment tax form or a foreign income tax form.
  • Using Turbotax Live: Turbotax Live is a premium service that provides live video assistance from a tax professional while you are preparing your taxes. If you use Turbotax Live, you will be charged a fee for the service.
  • Filing state taxes: Turbotax charges a separate fee for preparing and filing state tax returns in addition to federal tax returns.
  • Refund processing fee: TurboTax accepts payment through all major credit and debit cards, but you can also choose to pay out of your federal tax refund. However, this comes with an additional fee.

Key takeaways

It’s normal to be concerned about audits. Paying a relatively small amount for the peace of mind of having a tax professional by your side may seem like a no-brainer. However, consider this before making a decision.

  • Audits are rare. In 2020, only 0.3% of individual tax returns were audited.
  • People with straightforward tax returns (typically those that use online tax preparations services) are even less likely to be audited.
  • TurboTax Audit Defense will only provide basic advice and help you draft response letters.
  • It doesn’t cover additional tax due, extra preparation time, which often represents the bulk of the billable time.
  • TurboTax’s Audit Support feature is free and provides much of what you will receive with the premium version.
  • Audit Defense is not a TurboTax service. offers it.

View Article Sources
  1. Best Tax Preparation Companies – SuperMoney
  2. How will the IRS conduct my audit – IRS
  3. Best Tax Relief Companies – SuperMoney
  4. What documents do I need to provide in an audit? – IRS
  5. What to do when audited by the IRS – SuperMoney
  6. IRS Tax Audits – SuperMoney
  7. Top IRS red flags that may trigger an audit – SuperMoney