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IRS stops firms like TurboTax from hiding free tax-filing products in searches

88 points by hsnewman 7y ago

save_ferris 7y ago
This might be a controversial viewpoint, but it's way too cumbersome to pay your taxes in the US currently, and I don't see how anyone but companies like TurboTax benefit from obscuring access to basic tax prep software. This industry currently reeks of rent-seeking. The complexity of the tax code is often subject to debate, but we don't spend as much time discussing how to deploy a technological solution that uses your tax records to predetermine what you owe, with an optional process to file your own if you choose.
- saagarjha 7y ago
  It’s not controversial at all; your view is shared quite widely ;)
- Freak_NL 7y ago
  Is that still a controversial standpoint in the US? Whenever threads about taxes in the US reach the HN front page, you get an overwhelming amount of comments from surprised posters outside of the US who can't imagine having to fill in everything themselves (me, a Dutchman who spends at most five minutes on his taxes every year, included), in addition to Americans who wish it were so in the US. No one really defends the current situation on HN.
  - hanniabu 7y ago
    > spends at most five minutes on his taxes every year That is a dream come true. Honestly, I would just settle for competent government websites though. I had doing anything on federal or state websites because of the lack of information (they expect everyone already know what to do without explanation), links that should lead to more information but are just broken links that lead to nowhere, or links to forms that are broken and link to nowhere. On top of that you can rarely call in for anything because they think their website can handle everything and will typically just tell you to go there (either by person or prompt). On top of that you need a separate login for every government service website and need to fill out the same information on each site (just like you need to with every new doctor you visit in the US, form after form, all the same questions). Sorry, rambling at this point. /rant
  - mirimir 7y ago
    > ... surprised posters outside of the US who can't imagine having to fill in everything themselves ... Maybe it's a holdover from times when many earned substantial cash income. Tips, for example.
    - Fnoord 7y ago
      Yeah, well, the tipping culture is ridiculous anyway. Culturally enforced tip to people who earn below minimum wage. If tip is too small, it is still insulting. Just add it to the price already? Same with taxes. Why would you not include these in the cost the customer is going to pay? I find it dishonest.
      - mirimir 7y ago
        I like tips. They're a reward for good service. But maybe that was a bad example. Many people used to work for cash.
        Fnoord 7y ago
        I like tips when they're optional, yes (we tip in Europe; I tip in Europe). When they're mandatory, it shouldn't be a tip; it should be included in the price. Because else, it is a cheap method to shift the blame.
  - patrickmcnamara 7y ago
    I've heard Americans defend it saying that Americans don't trust the government to do it for them, even on Hacker News. I don't really understand that argument as you can just do your taxes the same as you currently do to see if they are overcharging or whatever.
- hsnewman 7y ago
  What I can't understand about our taxes is why we have to report income if they know what it is already. They should send us that information and let us complete the form for our deductions.
  - TazeTSchnitzel 7y ago
    Many other countries already do that, I guess because they don't have Intuit lobbying the hell out of them.
  - glofish 7y ago
    It is very simple really - and I have come to believe that the rationale is correct - even though I wish it weren't. Making taxes difficult to pay and a major annoyance contributes to keeping taxes lower than would be otherwise.
    - dragonwriter 7y ago
      > Making taxes difficult to pay and a major annoyance contributes to keeping taxes lower than would be otherwise. It contributes to the political success of politicians who rail against taxes leveraging the frustration, but then take action that doesn't address the frustration even if it relates to taxes being lower for someone. Also, making people do extra work or pay someone else to do it is a tax, it's just an in-kind tax that provides no usable revenue or value, rather than an in-money tax that provides usable revenue. It's not usually counted in the cost of taxes, just like various mandatory fees aren't counted in airline price comparisons. But that's fundamentally misleading, in both cases.
      - glofish 7y ago
        I am not disagreeing with you, just slowly came to realize that the world is not all that logical, nor are well-intentioned people all that good at understanding all the consequences. Convenience in some cases may be counter-productive and ends up with unexpected side effects. I do happen to believe that taxes in the US are lower because of the way taxes are collected and that you are forced to "see" exactly what goes where. If it were just a line, sign here, and press a button I would do just that, press a button and submit. This approach may save me a few hours a year, ok, but I also think I would make less effort to look up ways to save taxes and I would simply be less aware of the various mechanisms that are there. For example, I understood long term gains and qualified dividends much better after adding these in (semi-manually) and seeing how it all affects the bottom line. I also understand much better how to do tax loss harvesting and other similar methods.
- SolaceQuantum 7y ago
  I don't even think that's controversial among accountants. My personal accountant agrees that for basic, wage-based income, and no further tax-related assets, he really shouldn't be used and his skills are more applicable to complex cases which require his time.
- dragonwriter 7y ago
  > This might be a controversial viewpoint, but it's way too cumbersome to pay your taxes in the US currently, and I don't see how anyone but companies like TurboTax benefit from obscuring access to basic tax prep software That's a pretty widespread view, and the source of this IRS action.
ldh 7y ago
Also the IRS: making tax filing free and super simple would be bad for shareholder value
dublinben 7y ago
Discussed 3 days ago: https://news.ycombinator.com/item?id=21923220 https://news.ycombinator.com/item?id=21923220
deleted 7y ago
[deleted]
eli 7y ago
A huge win for the power of journalism. ProPublica has been absolutely dominating this story with a series of deeply reported articles https://www.propublica.org/series/the-turbotax-trap https://www.propublica.org/series/the-turbotax-trap
golemotron 7y ago
> Now an addendum to the Memorandum of Understanding between the IRS and the Free File Alliance prevents companies from "engaging in any practice" that would hide Free File options from "an organic internet search." This begs the question of whether organic internet search even exists.
hanniabu 7y ago
Is there anything preventing TurboTax from making their free version less user friendly and removing features, essentially making is much hard to use as an average layman to incentivize you to use the paid version?
- anamexis 7y ago
  I’d say no, since that’s what they’ve been doing the entire time.
hanniabu 7y ago
I'm sure now they'll be fighting for tens of millions in grants to support this service.

88 points by hsnewman 7y ago

This might be a controversial viewpoint, but it's way too cumbersome to pay your taxes in the US currently, and I don't see how anyone but companies like TurboTax benefit from obscuring access to basic tax prep software. This industry currently reeks of rent-seeking. The complexity of the tax code is often subject to debate, but we don't spend as much time discussing how to deploy a technological solution that uses your tax records to predetermine what you owe, with an optional process to file your own if you choose.

saagarjha 7y ago
It’s not controversial at all; your view is shared quite widely ;)
Freak_NL 7y ago
Is that still a controversial standpoint in the US? Whenever threads about taxes in the US reach the HN front page, you get an overwhelming amount of comments from surprised posters outside of the US who can't imagine having to fill in everything themselves (me, a Dutchman who spends at most five minutes on his taxes every year, included), in addition to Americans who wish it were so in the US. No one really defends the current situation on HN.
- hanniabu 7y ago
  > spends at most five minutes on his taxes every year That is a dream come true. Honestly, I would just settle for competent government websites though. I had doing anything on federal or state websites because of the lack of information (they expect everyone already know what to do without explanation), links that should lead to more information but are just broken links that lead to nowhere, or links to forms that are broken and link to nowhere. On top of that you can rarely call in for anything because they think their website can handle everything and will typically just tell you to go there (either by person or prompt). On top of that you need a separate login for every government service website and need to fill out the same information on each site (just like you need to with every new doctor you visit in the US, form after form, all the same questions). Sorry, rambling at this point. /rant
- mirimir 7y ago
  > ... surprised posters outside of the US who can't imagine having to fill in everything themselves ... Maybe it's a holdover from times when many earned substantial cash income. Tips, for example.
  - Fnoord 7y ago
    Yeah, well, the tipping culture is ridiculous anyway. Culturally enforced tip to people who earn below minimum wage. If tip is too small, it is still insulting. Just add it to the price already? Same with taxes. Why would you not include these in the cost the customer is going to pay? I find it dishonest.
    - mirimir 7y ago
      I like tips. They're a reward for good service. But maybe that was a bad example. Many people used to work for cash.
      - Fnoord 7y ago
        I like tips when they're optional, yes (we tip in Europe; I tip in Europe). When they're mandatory, it shouldn't be a tip; it should be included in the price. Because else, it is a cheap method to shift the blame.
- patrickmcnamara 7y ago
  I've heard Americans defend it saying that Americans don't trust the government to do it for them, even on Hacker News. I don't really understand that argument as you can just do your taxes the same as you currently do to see if they are overcharging or whatever.
hsnewman 7y ago
What I can't understand about our taxes is why we have to report income if they know what it is already. They should send us that information and let us complete the form for our deductions.
- TazeTSchnitzel 7y ago
  Many other countries already do that, I guess because they don't have Intuit lobbying the hell out of them.
- glofish 7y ago
  It is very simple really - and I have come to believe that the rationale is correct - even though I wish it weren't. Making taxes difficult to pay and a major annoyance contributes to keeping taxes lower than would be otherwise.
  - dragonwriter 7y ago
    > Making taxes difficult to pay and a major annoyance contributes to keeping taxes lower than would be otherwise. It contributes to the political success of politicians who rail against taxes leveraging the frustration, but then take action that doesn't address the frustration even if it relates to taxes being lower for someone. Also, making people do extra work or pay someone else to do it is a tax, it's just an in-kind tax that provides no usable revenue or value, rather than an in-money tax that provides usable revenue. It's not usually counted in the cost of taxes, just like various mandatory fees aren't counted in airline price comparisons. But that's fundamentally misleading, in both cases.
    - glofish 7y ago
      I am not disagreeing with you, just slowly came to realize that the world is not all that logical, nor are well-intentioned people all that good at understanding all the consequences. Convenience in some cases may be counter-productive and ends up with unexpected side effects. I do happen to believe that taxes in the US are lower because of the way taxes are collected and that you are forced to "see" exactly what goes where. If it were just a line, sign here, and press a button I would do just that, press a button and submit. This approach may save me a few hours a year, ok, but I also think I would make less effort to look up ways to save taxes and I would simply be less aware of the various mechanisms that are there. For example, I understood long term gains and qualified dividends much better after adding these in (semi-manually) and seeing how it all affects the bottom line. I also understand much better how to do tax loss harvesting and other similar methods.
SolaceQuantum 7y ago
I don't even think that's controversial among accountants. My personal accountant agrees that for basic, wage-based income, and no further tax-related assets, he really shouldn't be used and his skills are more applicable to complex cases which require his time.
dragonwriter 7y ago
> This might be a controversial viewpoint, but it's way too cumbersome to pay your taxes in the US currently, and I don't see how anyone but companies like TurboTax benefit from obscuring access to basic tax prep software That's a pretty widespread view, and the source of this IRS action.

ldh 7y ago

Also the IRS: making tax filing free and super simple would be bad for shareholder value

dublinben 7y ago

Discussed 3 days ago: https://news.ycombinator.com/item?id=21923220 https://news.ycombinator.com/item?id=21923220

deleted 7y ago

[deleted]

eli 7y ago

A huge win for the power of journalism. ProPublica has been absolutely dominating this story with a series of deeply reported articles https://www.propublica.org/series/the-turbotax-trap https://www.propublica.org/series/the-turbotax-trap

golemotron 7y ago

> Now an addendum to the Memorandum of Understanding between the IRS and the Free File Alliance prevents companies from "engaging in any practice" that would hide Free File options from "an organic internet search." This begs the question of whether organic internet search even exists.

hanniabu 7y ago

Is there anything preventing TurboTax from making their free version less user friendly and removing features, essentially making is much hard to use as an average layman to incentivize you to use the paid version?

anamexis 7y ago
I’d say no, since that’s what they’ve been doing the entire time.

hanniabu 7y ago

I'm sure now they'll be fighting for tens of millions in grants to support this service.