6 ms·

Listen to TurboTax Lie to Get Out of Refunding Overcharged Customers

171 points by bbatsell 7y ago

vernie 7y ago
This pleases Grover Norquist.
alistairSH 7y ago
It's completely bonkers that the IRS has been prevented from providing a simple and free filing service for tax payers with basic returns.
- ranie93 7y ago
  An argument I've read from those opposing government created filling services or pre-filled tax forms is that it will in some manner facilitate government raising taxes
  - alistairSH 7y ago
    I'd love to know how they come to that conclusion.
    - cannonedhamster 7y ago
      Because they think people are more likely to challenge their taxes and be less complacent to tax hikes if they have to see it and deal with it yearly. In reality those who make enough to be concerned are already well aware of their tax obligation and how to minimize it. It's just hogwash to punish citizens and poor people especially.
  - ixwt 7y ago
    The line I've heard a few times is about forcing people to confront how much they're paying in taxes. If you have to do the numbers (or pay someone to do so), you will confront how much you're having to pay. Rather than just glancing at a form, and passing it on. I don't agree with that reasoning. It feels that we just look at the numbers, and punch them in. There were many people that were surprised that they had to pay extra taxes this year.
    - jcranmer 7y ago
      The Norquist anti-tax block wants people to have pain filing taxes so they can militate against it, or at least complain about how much they're being taxed. That said, my sense is that most people don't know what their total yearly tax is, nor their tax rate is, only their refund/tax payment that's due in April 15. As the Republicans found out recently, a lot of people complain about their "tax increase" when they don't don't get a refund, even if their actual tax rate went down.
      - cannonedhamster 7y ago
        Yup this is Republicans once again acting on behalf of a company instead of their constituents. It's not just federal either California had their Ready Return product a while back. We're the only country that does taxes this way. There's no reason to do it either. The IRS already knows how much you owe. Having the ability the revised statements is important and there should be an allocation table of where your tax money went provided with details available publicly.
        jcranmer 7y ago
        Honestly, I don't think the free tax filing software companies have enough pull here. There are other constituencies who are against the IRS telling you what you owe: * Special interest groups who have won tax credits/deductions--most of these don't get reported to the IRS, so it makes it easier to kill these off since fewer people will take advantage of them. * The anti-government crowd, who is a) afraid that the IRS could abuse this power to tax people more (if people get used to signing the dotted line, they might not notice if the IRS stops accounting correctly for some reason); b) adamant that people know just how much the government is "stealing" from them in taxes and so form a ready constituent for lower taxes; and c) generally don't like the idea of the government telling them what to do anyways, so the government just sending them a bill is the ultimate anathema. * People who are underreporting certain classes of incomes who might be afraid that there will be a push for broader mandatory reporting to help make taxes even simpler. Given that the political power of the second class I've mentioned is quite vast, they are sufficient to prevent the sensible implementation of the IRS-sends-you-a-bill even if TurboTax and the like were to stop lobbying the government.
  - tareqak 7y ago
    The IRS already checks your work to some degree when you file your taxes. A pre-filled tax form would basically just the IRS to do what it already does earlier, and allow the taxpayer to check the IRS's work instead: a role reversal.
  - buerkle 7y ago
    Planet Money did a good podcast about this topic, https://www.npr.org/sections/money/2019/04/03/709656642/episode-760-tax-hero https://www.npr.org/sections/money/2019/04/03/709656642/epis.... Grover Norquist and his Americans for Tax Reform has way too much leverage on Republicans for them to ever agree to pre-filled tax forms. It's a shame.
- mbell 7y ago
  I think this is large simplification of the issue. The agreement does prevent the IRS from creating a free filing system, but requires the private companies involved to produce a free filing system for 60% of filers which is currently anyone making under $66,000 per year. Functionally this amounts to the IRS outsourcing the development and operating costs of the system to the private companies involved. In turn this means the folks paying those companies for filing, ostensibly meaning those making over $66,000 a year, are paying the tax filing costs of those making less. I don't think this is a particularly bad deal given how awful the government is at building things like this, look at the cost of HealthCare.gov as an example. Where I take issue with the agreement is that it should have put in place requirements to promote/advertise the free option to anyone qualified for it.
  - ocdtrekkie 7y ago
    Indeed. I think the government needs to revise the deal. These corporate tools are well-designed to make the tax system fairly understandable and straightforward, I found using TurboTax to be pretty pleasant, and I highly doubt an IRS-built system would feel as polished. I see nothing wrong with the inherent basis of the free file program, they just need to literally forbid the companies from charging for comparable tax services to free file eligible users. Tax companies would still have a strong incentive to run it, as users using their under $66,000 are likely to continue doing so once they rise above that mark.
    - tracer4201 7y ago
      I don’t do my own taxes anymore due to the complexity. The last year I filed my taxes myself was in 2014, and I used Turbo Tax’s online product. 1. It makes no sense to me why I have to pay because my income was over some threshold. Why does the government prop up an industry and force me to pay to file my taxes. If Uncle Sam already knows what I owe, just show it to me to review and a box to sign and attach bank account details. This is a scam. Uncle Sam has an agreement with these companies not to provide a product and relies on these companies instead, who are only in it to maximize profit. It doesn’t make sense. 2. There was no traceability. At least in 2014, Turbo Tax had me enter my W2, add in some interest I’d earned and then connect to my brokerage accounts to pull in cost basis and selling prices for various equity trades. Then they told me I owe about $85K. A magic number... great! This was all wrong. My W2 withholding was fine, and the sum of what I owed on a few trades I made that year and accrued interest was closer to $12K. I don’t trust TurboTax. Maybe it’s sufficient if all you have is a W2, but they’re not acting on their customers behalf. They exist to maximize their own profit.
mimixco 7y ago
Slimeballs
Someone1234 7y ago
A lot of focus is on the bribers (TurboTax, H&R Block) rather than the bribees (politicians). But that's curious because the bribers are acting in their own interests whereas the bribees are meant to protect the general public and are failing in their duties. The misplaced focus might actually be why this continues seemingly unabated. Two other examples of this phenomenon: College textbooks and ticket fees (TicketMaster, et al). In both cases the company acts as a lightning rod deflecting blame away from the only parties able to actually change things (college professors and performers respectively) and who are failing in their duty to protect others (students and fans). I'm surprised this doesn't have a name, seems super common (and quite effective). PS - No doubt someone will intentionally or unintentionally misread my post as defending this behavior rather than pointing out that politicians are really the ones that allow this to continue. I'm critical that the focus is not on the MOST guilty, not that TurboTax et al aren't guilty.
- deogeo 7y ago
  The bribes could easily be viewed as deliberately interfering with the politician's sworn oaths - the crime is https://en.wikipedia.org/wiki/Tortious_interference https://en.wikipedia.org/wiki/Tortious_interference And "acting in their own self interests" is an explanation, but not a justification, and doesn't lessen the crime in any way.
- llamataboot 7y ago
  I agree with your main point, and of course many other industries are the same. But you could also say politicians are acting in /their/ best interests in the system we have set up, so we need to change the system. Your other two examples are a little fuzzier however. Professors often try to make as much material available at libraries, or online, etc as they can but don't really have substantial control over the publishing industry, and performers have /no control/ over ticketmaster. Ticketmaster contracts with venues, if you want to play in that venue, you've gotta go TM. Some bands (Pearl Jam notably) have tried to bypass this system entirely and other bands have managed to carve out exceptions to sell some block of tickets directly to fans without the fees, but unless they could go on mass strike, there's not much they can do to pressure them. It's the arena/TM conglomerate that's the problem in that case.
wutman 7y ago
You'd think TurboTax would have clear scripts for their frontline representatives to deal with this fairly and quickly. Rip the band-aid off all at once, so to speak. There's not exactly a clear message between these representatives, though. Not having a clear message shifts the focal point from management right to the poor frontline workers.
Circuits 7y ago
Why wouldn't you just file your own damn taxes?
- perl4ever 7y ago
  Speaking as someone who has bypassed the interview/wizard mode since it was invented... The advantage of TurboTax is that it incorporates the relationships between different lines of all the forms. So your workflow doesn't have to involve reading and understanding all of them up front. Rather, you can enter numbers and see how they change, and deduce the rules from that. To some people, this is a much easier way of understanding a complex system. It may be partly personal preference, but I think also that instructions everywhere, are getting worse and worse, and so it's becoming more practical to take an experimental approach in a variety of situations.
BandOfBots 7y ago
There are two groups of accountants / CPA firms; those that work for you and those that work for the government. The Public can't afford the accountant that works for them. I've long suspected TurboTax and H&R Block to be in bed with the G. We out not to be surprised if we end up learning Intuit/QuickBooks is secretly sharing their customers financial records, to red flag businesses who tax filings don't match up with their QuickBooks GL.
KiDD 7y ago
I want to punch this guy on the phone in the face.

171 points by bbatsell 7y ago

This pleases Grover Norquist.

It's completely bonkers that the IRS has been prevented from providing a simple and free filing service for tax payers with basic returns.

ranie93 7y ago
An argument I've read from those opposing government created filling services or pre-filled tax forms is that it will in some manner facilitate government raising taxes
- alistairSH 7y ago
  I'd love to know how they come to that conclusion.
  - cannonedhamster 7y ago
    Because they think people are more likely to challenge their taxes and be less complacent to tax hikes if they have to see it and deal with it yearly. In reality those who make enough to be concerned are already well aware of their tax obligation and how to minimize it. It's just hogwash to punish citizens and poor people especially.
- ixwt 7y ago
  The line I've heard a few times is about forcing people to confront how much they're paying in taxes. If you have to do the numbers (or pay someone to do so), you will confront how much you're having to pay. Rather than just glancing at a form, and passing it on. I don't agree with that reasoning. It feels that we just look at the numbers, and punch them in. There were many people that were surprised that they had to pay extra taxes this year.
  - jcranmer 7y ago
    The Norquist anti-tax block wants people to have pain filing taxes so they can militate against it, or at least complain about how much they're being taxed. That said, my sense is that most people don't know what their total yearly tax is, nor their tax rate is, only their refund/tax payment that's due in April 15. As the Republicans found out recently, a lot of people complain about their "tax increase" when they don't don't get a refund, even if their actual tax rate went down.
    - cannonedhamster 7y ago
      Yup this is Republicans once again acting on behalf of a company instead of their constituents. It's not just federal either California had their Ready Return product a while back. We're the only country that does taxes this way. There's no reason to do it either. The IRS already knows how much you owe. Having the ability the revised statements is important and there should be an allocation table of where your tax money went provided with details available publicly.
      - jcranmer 7y ago
        Honestly, I don't think the free tax filing software companies have enough pull here. There are other constituencies who are against the IRS telling you what you owe: * Special interest groups who have won tax credits/deductions--most of these don't get reported to the IRS, so it makes it easier to kill these off since fewer people will take advantage of them. * The anti-government crowd, who is a) afraid that the IRS could abuse this power to tax people more (if people get used to signing the dotted line, they might not notice if the IRS stops accounting correctly for some reason); b) adamant that people know just how much the government is "stealing" from them in taxes and so form a ready constituent for lower taxes; and c) generally don't like the idea of the government telling them what to do anyways, so the government just sending them a bill is the ultimate anathema. * People who are underreporting certain classes of incomes who might be afraid that there will be a push for broader mandatory reporting to help make taxes even simpler. Given that the political power of the second class I've mentioned is quite vast, they are sufficient to prevent the sensible implementation of the IRS-sends-you-a-bill even if TurboTax and the like were to stop lobbying the government.
- tareqak 7y ago
  The IRS already checks your work to some degree when you file your taxes. A pre-filled tax form would basically just the IRS to do what it already does earlier, and allow the taxpayer to check the IRS's work instead: a role reversal.
- buerkle 7y ago
  Planet Money did a good podcast about this topic, https://www.npr.org/sections/money/2019/04/03/709656642/episode-760-tax-hero https://www.npr.org/sections/money/2019/04/03/709656642/epis.... Grover Norquist and his Americans for Tax Reform has way too much leverage on Republicans for them to ever agree to pre-filled tax forms. It's a shame.
mbell 7y ago
I think this is large simplification of the issue. The agreement does prevent the IRS from creating a free filing system, but requires the private companies involved to produce a free filing system for 60% of filers which is currently anyone making under $66,000 per year. Functionally this amounts to the IRS outsourcing the development and operating costs of the system to the private companies involved. In turn this means the folks paying those companies for filing, ostensibly meaning those making over $66,000 a year, are paying the tax filing costs of those making less. I don't think this is a particularly bad deal given how awful the government is at building things like this, look at the cost of HealthCare.gov as an example. Where I take issue with the agreement is that it should have put in place requirements to promote/advertise the free option to anyone qualified for it.
- ocdtrekkie 7y ago
  Indeed. I think the government needs to revise the deal. These corporate tools are well-designed to make the tax system fairly understandable and straightforward, I found using TurboTax to be pretty pleasant, and I highly doubt an IRS-built system would feel as polished. I see nothing wrong with the inherent basis of the free file program, they just need to literally forbid the companies from charging for comparable tax services to free file eligible users. Tax companies would still have a strong incentive to run it, as users using their under $66,000 are likely to continue doing so once they rise above that mark.
  - tracer4201 7y ago
    I don’t do my own taxes anymore due to the complexity. The last year I filed my taxes myself was in 2014, and I used Turbo Tax’s online product. 1. It makes no sense to me why I have to pay because my income was over some threshold. Why does the government prop up an industry and force me to pay to file my taxes. If Uncle Sam already knows what I owe, just show it to me to review and a box to sign and attach bank account details. This is a scam. Uncle Sam has an agreement with these companies not to provide a product and relies on these companies instead, who are only in it to maximize profit. It doesn’t make sense. 2. There was no traceability. At least in 2014, Turbo Tax had me enter my W2, add in some interest I’d earned and then connect to my brokerage accounts to pull in cost basis and selling prices for various equity trades. Then they told me I owe about $85K. A magic number... great! This was all wrong. My W2 withholding was fine, and the sum of what I owed on a few trades I made that year and accrued interest was closer to $12K. I don’t trust TurboTax. Maybe it’s sufficient if all you have is a W2, but they’re not acting on their customers behalf. They exist to maximize their own profit.

mimixco 7y ago

Slimeballs

Someone1234 7y ago

A lot of focus is on the bribers (TurboTax, H&R Block) rather than the bribees (politicians). But that's curious because the bribers are acting in their own interests whereas the bribees are meant to protect the general public and are failing in their duties. The misplaced focus might actually be why this continues seemingly unabated. Two other examples of this phenomenon: College textbooks and ticket fees (TicketMaster, et al). In both cases the company acts as a lightning rod deflecting blame away from the only parties able to actually change things (college professors and performers respectively) and who are failing in their duty to protect others (students and fans). I'm surprised this doesn't have a name, seems super common (and quite effective). PS - No doubt someone will intentionally or unintentionally misread my post as defending this behavior rather than pointing out that politicians are really the ones that allow this to continue. I'm critical that the focus is not on the MOST guilty, not that TurboTax et al aren't guilty.

deogeo 7y ago
The bribes could easily be viewed as deliberately interfering with the politician's sworn oaths - the crime is https://en.wikipedia.org/wiki/Tortious_interference https://en.wikipedia.org/wiki/Tortious_interference And "acting in their own self interests" is an explanation, but not a justification, and doesn't lessen the crime in any way.
llamataboot 7y ago
I agree with your main point, and of course many other industries are the same. But you could also say politicians are acting in /their/ best interests in the system we have set up, so we need to change the system. Your other two examples are a little fuzzier however. Professors often try to make as much material available at libraries, or online, etc as they can but don't really have substantial control over the publishing industry, and performers have /no control/ over ticketmaster. Ticketmaster contracts with venues, if you want to play in that venue, you've gotta go TM. Some bands (Pearl Jam notably) have tried to bypass this system entirely and other bands have managed to carve out exceptions to sell some block of tickets directly to fans without the fees, but unless they could go on mass strike, there's not much they can do to pressure them. It's the arena/TM conglomerate that's the problem in that case.

wutman 7y ago

You'd think TurboTax would have clear scripts for their frontline representatives to deal with this fairly and quickly. Rip the band-aid off all at once, so to speak. There's not exactly a clear message between these representatives, though. Not having a clear message shifts the focal point from management right to the poor frontline workers.

Circuits 7y ago

Why wouldn't you just file your own damn taxes?

perl4ever 7y ago
Speaking as someone who has bypassed the interview/wizard mode since it was invented... The advantage of TurboTax is that it incorporates the relationships between different lines of all the forms. So your workflow doesn't have to involve reading and understanding all of them up front. Rather, you can enter numbers and see how they change, and deduce the rules from that. To some people, this is a much easier way of understanding a complex system. It may be partly personal preference, but I think also that instructions everywhere, are getting worse and worse, and so it's becoming more practical to take an experimental approach in a variety of situations.

BandOfBots 7y ago

There are two groups of accountants / CPA firms; those that work for you and those that work for the government. The Public can't afford the accountant that works for them. I've long suspected TurboTax and H&R Block to be in bed with the G. We out not to be surprised if we end up learning Intuit/QuickBooks is secretly sharing their customers financial records, to red flag businesses who tax filings don't match up with their QuickBooks GL.

KiDD 7y ago

I want to punch this guy on the phone in the face.