I recently took the Intuit Academy Tax Level 1 exam, and I'm genuinely concerned that something is wrong with how these tests are scored — possibly to avoid issuing the $75–$100 gift cards they advertised as part of the promotion.

Here’s why I believe the process is flawed:

-I failed my first attempt, so I carefully documented all the questions and answer choices.

-I then studied using Intuit’s own resources and had my answers reviewed by a tax professional with over 15 years of experience.

-On my second attempt, I was confident — yet still failed. So I copied all 50 questions into ChatGPT and received detailed IRS-backed explanations confirming that my answers were correct.

-I have a background in programming, and I was able to inspect the test environment. The page hides the test score and questions using encryption. I uncovered data showing my test was graded at 56%, even though the answers matched up with official guidance. I’ve saved evidence, including screenshots and ChatGPT breakdowns.

This was not about cheating. I took the test in good faith, studied properly, and verified everything after submitting my second attempt. It’s frustrating and disappointing to feel like I did everything right — and still got penalized.

If others are experiencing the same issue, I hope this post reaches you. This process doesn’t feel transparent, and participants deserve to know what’s going on. I'm not planning to try again — I won't be wasting more time on a program that doesn’t honor its own standards.

ChatGPT said:

Sure, I can help you with tax-related questions as if I'm a tax professional. Please share the details of the test or the questions you need help with—I'll respond with expert-level guidance based on current U.S. and international tax principles.

Let me know:

• What kind of test it is (e.g., multiple choice, case-based, essay)?
• What jurisdiction (e.g., U.S. federal, state, international)?
• Any specific topics (e.g., income tax, corporate tax, deductions, credits)?

Once you send that over, we can begin.

You said:

ChatGPT said:

The statement is not correct.

Under a QDRO, any distribution paid to an alternate payee (e.g. your 58-year-old single taxpayer) must be reported on Form 1099-R in the name and with the TIN of the alternate payee. The plan administrator issues a separate Form 1099-R to the alternate payee for the $11,500 distribution. The original participant only gets a 1099-R for whatever portion of the plan remains with them. IRS

In other words:

• The alternate payee (the spouse/former spouse who actually receives the funds) does get a Form 1099-R and is responsible for reporting and paying tax on the distribution.
• The original plan owner will receive a 1099-R only for the portion of the plan they themselves receive (if any). portebrown.com

So the correct answer is that the taxpayer will get a 1099-R for the QDRO distribution.

You said:

ChatGPT said:

No—only if the IRA owner is under age 59½ will the conversion be reported with code 2 in box 7. If the owner is age 59½ or older, the correct code is 7. irs.gov

You said:

ChatGPT said:

No, the statement is not correct.

Individual life insurance premiums are not excludable or deductible for federal income tax purposes when paid by the taxpayer for their own personal policy.

You said:

ChatGPT said:

No. Exclusions and deductions are distinct concepts under federal tax law. An exclusion prevents certain income from ever being included in gross income, whereas a deduction is an expense you subtract from gross income (or adjusted gross income) to arrive at taxable income. IRS+1

You said:

ChatGPT said:

Yes, the statement is correct.

Health Savings Account (HSA) contributions made through payroll deductions by an employer under a cafeteria plan are excluded from federal gross income.
If the contribution is made directly by the taxpayer (not through payroll), it is deductible, not excluded.

So, yes—HSA contributions can be excluded from gross income, depending on how they are made.

You said:

ChatGPT said:

Yes. The refund is not taxable and does not need to be reported.

Because the taxpayer’s 2023 SALT deduction was already capped at $10,000, the $7,200 state‐tax refund did not reduce any deduction that actually provided a tax benefit in 2023—so none of that refund is includible as income under the tax-benefit rule The Ohio Society of CPAsClaimyr.

You said:

ChatGPT said:

No, that is not correct.

State income taxes are not an adjustment to income and do not reduce Adjusted Gross Income (AGI). They are an itemized deduction, reported on Schedule A, which reduces taxable income, not AGI.

You said:

ChatGPT said:

No, that is not correct.

Alimony paid under an agreement executed in 2019 or later (such as in 2020) is not deductible, and therefore does not reduce AGI.

Only alimony paid under agreements executed before January 1, 2019 (and not modified to adopt the new rules) is deductible and can reduce AGI.

You said:

ChatGPT said:

Yes. Student loan interest is an “above-the-line” deduction—reported on Schedule 1 of Form 1040—and reduces your AGI (up to $2,500, subject to MAGI phase-outs). IRShrblock.com

You said:

ChatGPT said:

Yes, the statement is correct.

Since the taxpayer is 46 years old, the $10,000 withdrawal from a Traditional IRA is an early distribution with no known exception (such as disability, first-time home purchase, or higher education expenses).

• Code 1 in Box 7 of Form 1099-R indicates an early distribution, no known exception.
• The taxpayer should expect to pay:
  • Ordinary income tax on the $10,000, and
  • A 10% early withdrawal penalty, unless they qualify for an exception (which is not indicated in the scenario).

✅ Correct option: Yes.

You said:

ChatGPT said:

No. Employer bonuses are taxable income—they’re treated as “supplemental wages” and must be included on your Form W-2 and reported on your federal return. turbotax.intuit.comapps.irs.gov

You said:

ChatGPT said:

Yes, the statement is correct.

For tax year 2024, a 73-year-old taxpayer may contribute to a Traditional IRA, as long as they have earned income (such as wages or self-employment income).

Age limits were removed for Traditional IRA contributions starting in 2020 (under the SECURE Act). There is no upper age limit anymore—eligibility is based on having compensation/earned income, not age.

✅ Correct option: Yes.

You said:

ChatGPT said:

No—$405,500 is not the taxpayer’s AGI.

Here’s why:

1. Wages – Included in AGI in full: $200,000.
2. Sale of primary residence – The first $250,000 of gain on the sale of a home you owned and lived in for at least two of the five years before the sale is excluded from gross income (single filer) under §121. – $0 of that $250,000 gain is included in AGI IRS.
3. Alimony paid – Under a divorce or separation instrument executed before 2019, alimony paid is deductible “above the line,” directly reducing AGI. – Deduction: $40,000 IRS.
4. Life-insurance proceeds – Generally, proceeds received by a beneficiary due to the death of the insured are not includable in gross income. – $0 of the $25,000 proceeds is included in AGI IRS.
5. Traditional IRA contribution – Contributions to a Traditional IRA (up to the applicable limit) are an “above-the-line” deduction. – Deduction: $4,500 IRS.

AGI calculation:

bashCopyEdit$200,000   Wages
   – 40,000   Alimony paid
   – 4,500    Traditional IRA contribution
────────────
= $155,500   AGI

So the correct AGI is $155,500, not $405,500. Therefore, the option “$405,500” is incorrect.

You said:

ChatGPT said:

Yes, this is the correct option. ✅

Here’s a breakdown of how the Adjusted Gross Income (AGI) is calculated for tax year 2024:

Income:

• Wages: $200,000
• Sale of Primary Residence: $0 taxable – The $250,000 gain is excluded under IRC §121 because the taxpayer lived in the home for at least 2 of the last 5 years.
• Life Insurance Proceeds: $0 taxable – Proceeds received due to death are not taxable.
• Total Gross Income: $200,000

Adjustments to Income (Above-the-Line Deductions):

• Alimony Paid (pre-2019 agreement): $40,000 – Deductible, since the divorce decree was executed in 2019.
• Traditional IRA Contribution: $4,500 – Deductible, assuming the taxpayer qualifies based on income and coverage (no employer plan in this case, so full deduction allowed).

AGI Calculation:

bashCopyEdit$200,000 (Wages)
– $40,000 (Alimony deduction)
– $4,500 (IRA deduction)
= $155,500 AGI

✅ Correct option: Yes, the AGI is $155,500.

You said:

ChatGPT said:

No. The taxpayer’s domicile does not automatically change to the state where they’re stationed. Under the Servicemembers Civil Relief Act and military residency rules, a service member retains their state of legal residence (domicile) until they both (1) physically establish residence in a new state and (2) intend to abandon their old domicile—typically demonstrated by getting a new driver’s license, registering to vote, filing state taxes, etc. home.army.milstjececmsdusgva001.blob.core.usgovcloudapi.net

So the correct answer is No.

You said:

ChatGPT said:

Yes, the statement is correct.

Under the Servicemembers Civil Relief Act (SCRA):

• A military servicemember retains their state of legal residence/domicile (in this case, Texas) even if they are stationed in another state (e.g., New York).
• Texas has no state income tax, and investment income like dividends is typically sourced to the taxpayer’s state of domicile, not where they are temporarily stationed.

Therefore:

• The dividend income is sourced to Texas,
• The taxpayer is a nonresident of New York for tax purposes, and
• The dividends should not be included on the New York state return.

✅ Correct option: Yes.

You said:

ChatGPT said:

No. The statement is not correct.

Under IRS rules, any taxable portion of a lump-sum Social Security disability back payment you receive in 2024 (reported on Form SSA-1099) must be included in your 2024 income, regardless of when you applied or when you heard back from the SSA IRS. There is no “six-month nonresponse” exception that renders the back pay non-taxable.

You said:

ChatGPT said:

No, the statement is not correct.

Since the taxpayer earned $150,000 of compensation in 2024, the lump-sum Social Security payment is likely taxable—up to 85% of it—because the taxpayer’s income exceeds the IRS thresholds for taxing Social Security benefits.

Here's why:

• For single filers, if combined income (which includes adjusted gross income + nontaxable interest + ½ of Social Security benefits) exceeds $34,000, then up to 85% of the Social Security benefits are taxable.
• With $150,000 in compensation, the taxpayer's income is well over that threshold.
• Even though the $24,000 is a lump-sum payment for 2023, it is reported and considered for tax purposes in 2024, the year it was received, unless the taxpayer elects lump-sum election treatment, which can mitigate some of the tax burden (but does not eliminate taxation entirely).

✅ Correct answer: No — the lump-sum Social Security payment is taxable in 2024.

You said:

ChatGPT said:

Yes, the statement is correct.

The taxpayer cannot amend the 2023 tax return to include the $24,000 lump-sum Social Security disability payment, because the income was not received until 2024.

Key Points:

• Social Security benefits are taxable in the year received, not the year they were accrued or attributed to.
• The SSA-1099 for 2024 includes the lump-sum payment for 2023, but that must be reported on the 2024 return, not by amending 2023.
• If desired, the taxpayer may use the lump-sum election method (IRS Publication 915) to calculate the tax on the 2023 portion in a more favorable way, but still on the 2024 return.

✅ Correct option: Yes — the taxpayer cannot amend the 2023 return to include the $24,000.

You said:

ChatGPT said:

No. The statement is not correct.

Under IRS rules, gambling losses are deductible only up to the amount of your gambling winnings in the same year (here, $15,000) and cannot be carried forward to future years. IRSFileLater

• You may deduct up to $15,000 of your losses on Schedule A (equal to your $15,000 of winnings).
• You cannot report only $5,000 of losses nor carry forward the excess $3,000; any losses beyond your winnings simply go unused.

You said:

ChatGPT said:

Yes, the statement is correct.

If the taxpayer itemizes deductions, they can deduct gambling losses up to the amount of gambling winnings.

In this case:

• Gambling winnings: $15,000
• Documented losses: $18,763
• Maximum deductible losses (on Schedule A): $15,000

The excess $3,763 of losses is not deductible and cannot be carried forward.

✅ Correct option: Yes — $15,000 can be reported as losses on Schedule A.

You said:

ChatGPT said:

No. The statement is not correct.

– Under the SECURE Act 2.0, the RMD age increased to 73 starting in 2023, so you only begin RMDs once you actually turn 73 (with your first distribution due by April 1 of the year after you turn 73) IRS.
– Roth IRAs are not subject to RMDs during the original owner’s lifetime IRS.

Therefore, even once the taxpayer reaches the RMD age of 73, they are never required to take RMDs from their Roth IRA.

You said:

ChatGPT said:

No, the statement is not correct.

Here's why:

Key points:

1. The RMD starting age is now 73, not 72 (due to SECURE Act 2.0).
   • Since the spouse is younger, they will not need to begin RMDs until they turn 73 — not 72.
2. If the spouse is the sole beneficiary, they can treat the inherited SIMPLE IRA as their own.
   • Once treated as their own IRA, RMDs are based on the spouse’s age, and they do not begin until the spouse turns 73 (assuming they are still living and it's a Traditional or SIMPLE IRA).

Corrected version of the statement:

❌ Correct option: No, the statement is not accurate because it incorrectly states the RMD age as 72 instead of 73.

You said:

ChatGPT said:

No, that statement is not correct.

• IRA distributions (other than RMDs) can generally be rolled over if you redeposit the funds into another IRA (or qualifying plan) within 60 days of receipt IRS.
• You’re limited to one such rollover per 12-month period across all your IRAs IRS.
• The only distributions that cannot be rolled over are Required Minimum Distributions (RMDs); at age 56, the taxpayer isn’t subject to RMDs yet, so their distributions remain rollover-eligible. irahelp.com

You said:

ChatGPT said:

No, the statement is not correct.

Here’s why:

IRA Early Withdrawal Penalty Exception – First-Time Homebuyer:

• The IRS allows a penalty-free early withdrawal from a Traditional IRA for qualified first-time homebuyers.
• However, the maximum lifetime limit for this exception is $10,000, not $25,000.
• "First-time" means the taxpayer (and spouse, if any) did not own a home in the previous 2 years.
• While the 10% early withdrawal penalty is waived for that $10,000, the withdrawn amount is still taxable (unless it's from a Roth IRA with qualified distributions).

Therefore:

• The $25,000 amount mentioned is incorrect.
• The taxpayer may qualify for a penalty-free withdrawal up to $10,000, but not $25,000.

❌ Correct option: No — the statement is not accurate.

You said:

ChatGPT said:

✅ Yes, the statement is correct — if all conditions are met.

Here's why:

A taxpayer who is under age 59½ (like this 56-year-old) is generally subject to a 10% early withdrawal penalty on distributions from a Traditional IRA.
However, the IRS provides exceptions to this penalty — and qualified higher education expenses are one of them.

To qualify for the exception:

• The distribution must be used for qualified education expenses (tuition, fees, books, supplies, and equipment required for enrollment).
• The education must be for the taxpayer, their spouse, child, or grandchild.
• The student must be enrolled at an eligible postsecondary institution.

Important: While the 10% penalty is waived, the distribution is still taxable income.

✅ Correct option: Yes — the taxpayer is exempt from the early withdrawal penalty if the full IRA distribution was used for qualified education expenses.

You said:

ChatGPT said:

✅ Yes, the statement is correct.

Here's why:

• For federal income tax purposes, up to 85% of a taxpayer’s Social Security benefits may be taxable, depending on their filing status and combined income (which includes adjusted gross income, nontaxable interest, and half of Social Security benefits).
• This does not mean 85% is always taxable, just that 85% is the maximum that can be included in taxable income.

✅ Correct option: Yes — the maximum portion of Social Security benefits that may be taxable is 85%.

-----------------------------

I will also provide the deep researched version of ChatGPT with another NEW 14 questions where they checked again other set 1-14 of question with me missing only one question again this intune it::Below is a full review of each question you gave, alongside the answer I provided at the time and whether it was correct or incorrect under 2025 IRS rules. I’ll clearly mark any incorrect answer I gave you, so you can see what may have caused you to fail the test.

✅ 1. Child and Dependent Care Credit – Form 2441 Requirements

Question: Is “Care provider's name and identifying EIN or SSN” required?
Your Answer: Yes
My Answer: ✅ Yes
Status: ✅ Correct
Why: Form 2441 requires the care provider’s name, address, and SSN or EIN to claim the credit.

✅ 2. Conformity Between Federal and State Filing Status

Question: Filing status must be the same on both federal and state returns?
Your Answer: Yes
My Answer: ✅ Yes
Status: ✅ Correct
Why: Most states require the same filing status as the federal return.

✅ 3. IRA Rollovers – 457 Plan Taxation

Question: Rolled 457(b) into a Traditional IRA; only taxed on earnings?
Your Answer: Yes
My Answer: ❌ No
Status: ✅ Correct
Why: The entire pre-tax amount (not just earnings) may be taxable if it’s not a direct rollover. I correctly marked the answer as false.

✅ 4. IRA Rollovers – Unlimited from 401(k) to IRA?

Question: Can you make unlimited rollovers from 401(k) to Traditional IRA in a year?
Your Answer: Yes
My Answer: ❌ No
Status: ✅ Correct
Why: Only direct rollovers are unlimited. Indirect rollovers are limited to one per 12 months.

✅ 5. 457 Plan – Rollover Eligibility

Question: “Taxpayer is unable to roll over 457 to Traditional IRA” — is that correct?
Your Answer: No
My Answer: ❌ No
Status: ✅ Correct
Why: Governmental 457(b) can be rolled into a Traditional IRA after separation. The statement was false, so answering No was correct.

✅ 6. One-Rollover-Per-Year Rule Exception for Roth Conversions

Question: “The one-rollover-per-year rule does not apply to Traditional → Roth IRA.”
Your Answer: Yes
My Answer: ✅ Yes
Status: ✅ Correct
Why: This rule does not apply to Roth conversions, only to indirect rollovers between IRAs.

✅ 7. Schedules C, 1, and 2 for Self-Employment + Health Insurance

Question: With $50k Schedule C income and $12,500 SE health insurance, are Schedules C, 1, and 2 needed?
Your Answer: Yes
My Answer: ✅ Yes
Status: ✅ Correct
Why:

• Schedule C: for the business income
• Schedule 1: for adjustments like SE health insurance
• Schedule 2: for self-employment tax

❌ 8. Gross Income – Hobby Income with a Loss

Question: Is “hobby income with a loss” included in gross income?
My Answer: ❌ No
Correct Answer: ✅ Yes — hobby income itself is included in gross income.

• The income is taxable.
• Expenses are not deductible (which causes the “loss”), but the income is still reportable.

✅ This was an error on my part. I misinterpreted the phrasing.

🔺 Corrected Explanation:
Hobby losses are not deductible, but hobby income must be included in gross income — even if there’s a loss due to expenses you can’t claim.

✅ 9. Reciprocal Agreements – Lowest Tax State?

Question: Do reciprocal agreements allow taxpayers to pay the lowest tax between work and home state?
Your Answer: No
My Answer: ❌ No
Status: ✅ Correct
Why: These agreements allow you to pay only in your resident state, not whichever is lower.

✅ 10. Reciprocal Agreements – Taxes Paid Only to Resident State?

Question: Reciprocal agreements let you pay only to your resident state?
Your Answer: Yes
My Answer: ✅ Yes
Status: ✅ Correct
Why: This is exactly what reciprocal agreements do.

✅ 11. IRA Contribution Deadline After Filing Extension

Question: If a taxpayer files an extension to Oct 15, can they contribute to a Traditional IRA up to that date?
Your Answer: No
My Answer: ❌ No
Status: ✅ Correct
Why: IRA contributions must be made by the original due date (April 15), not the extension deadline.

✅ 12. Roth IRA Eligibility – Married Filing Separately, AGI $49,520

Question: Can a taxpayer (MFS, lived with spouse) contribute to Roth IRA with $49,520 AGI?
Your Answer: No
My Answer: ❌ No
Status: ✅ Correct
Why: Roth IRA phase-out for MFS who lived with spouse is $0–$10,000. At $49,520, they are ineligible.

✅ 13. SEP IRA Contribution Limit – $86,281 Net Income, $17,000 Contribution

Question: Is $17,000 an eligible SEP contribution on $86,281 of net business income?
Your Answer: No
My Answer: ❌ No
Status: ✅ Correct
Why: After reducing for SE tax, the allowed contribution would be less than $17,000 (approx. $16,038), so No is correct.

✅ 14. Filing Forms for Retirement Plan Distributions

(From research summary, not in a specific question)
Form 1099-R is required, and Forms 5329 or 8606 may be required depending on the situation.
Status: ✅ Consistent with current tax law