I used TurboTax for my 2013 return. According to TurboTax, I was able to claim the entire $2,000 lifetime learning credit as a refundable tax credit. I get a letter today from the IRS saying I owe them $2,000, because, as it turns out, the lifetime learning credit is non-refundable. I realize that I do not deserve this money, and I have to pay it back, but I feel like I was cheated and misled by Intuit. Do I have any recourse here? I obviously would not have claimed it if I knew it was non-refundable. Shouldn't Inuit have to at least pay the accrued interest?
Turbo Tax would not make the Lifetime Learning Credit refundable. There is a refundable education credit, the American Opportunity Credit. If you entered the wrong information, you might have tried to claim the wrong credit.
Before you pay all that back, take your tax return and the IRS letter to a professional for review. It may be that you are eligible for some education benefit which will reduce the amount you have to pay back. The IRS will not tell you that you might not owe the entire amount.
There WAS a glitch in 2013 TurboTax software. Even if you answered the questions correctly, the software would default to the lifetime credit instead of the AOC. Review your 2013 return to see it that was the case and if you should have claimed the AOC instead. If so, send an amended return back to the IRS with a copy of the notice. It will take 12 - 16 weeks (at least) for them to reply.
It is your responsibility to know that tax law when you do your own return. If you had, you would know the lifetime credit is not refundable. I used to work for TurboTax and no way would it do that. It was something else and it is usually all taxpayer entry error.