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FTC Is Investigating Intuit over TurboTax Practices

463 points by justinpropub 6y ago

briandear 6y ago
Not sure I understand the hate for TurboTax. Literally not a single person is forced to use it. I do use it and it's a very good product for the most part. Perhaps energy should be directed at the actual tax code complexity rather than software built to help navigate filing. Ted Cruz's tax plan would have practically eliminated the need for TurboTax-type software. https://taxfoundation.org/details-and-analysis-senator-ted-cruz-s-tax-plan/ https://taxfoundation.org/details-and-analysis-senator-ted-c... But, let's not forget what Milton Friedman had to say about tax reform: https://www.youtube.com/watch?v=TruCIPy79w8 https://www.youtube.com/watch?v=TruCIPy79w8
- tekknolagi 6y ago
  People hate TurboTax because Intuit spends obscene amounts of money lobbying to keep the tax code complicated so they have a market.
  - masklinn 6y ago
    They also spend obscene amounts of money killing online filing being provided by either state or fed. They spent more than 1.2 million in direct lobbying against California's online tax preparation & declaration system pilot (ReadyReturn) between 2001 and 2010.
- deleted 6y ago
  [deleted]
- save_ferris 6y ago
  > Perhaps energy should be directed at the actual tax code complexity rather than software built to help navigate filing. It's hard to tackle the complexity of the tax code when the company you're defending here has spent millions to keep it complex and out of the hands of the government.[0] The "tax complexity" argument is a red herring when talking about tax prep. The US government could absolutely offer free tax filing services to taxpayers without the help of private industry and also without needing to simplify the tax code. I'm not saying that the complexity of the tax code isn't a problem, but it's out of scope here. The idea that the complexity of the US tax code standing in the way of better filing options for taxpayers has absolutely no merit when companies are spending millions to fight legislation that gives the government the ability to offer its own tax prep software. This is rent-seeking behavior on the part of private industry, plain and simple. 0: https://www.propublica.org/article/filing-taxes-could-be-free-simple-hr-block-intuit-lobbying-against-it https://www.propublica.org/article/filing-taxes-could-be-fre...
  - StillBored 6y ago
    And just to add to this, the IRS software could be significantly easier to use than the commercial offerings. That is because they could pre-populate much of the W2/1099/stock sales/etc data since its all being reported to the IRS from other organizations. For the vast majority of people it could be as simple as logging into a web site and clicking "no" to a bunch of questions like "did you have more than 20k of medical bills last year", and then "I accept" at the bottom where it prints your final tax. As I understand it, that is how some other countries handle their taxes..
    - syshum 6y ago
      >>>And just to add to this, the IRS software could be significantly easier to use than the commercial offerings. Someone has never worked in government contracting or developing Software from Government Committee a IRS Tax Software would look more than the universally hated Unemployment Systems, or the government healthcare markets Not a easy to use streamline system If you want something to be inefficient, have the government do it
      - colejohnson66 6y ago
        Here’s the thing though: the IRS already has all the information they need for a majority of the population. Why does everyone need to fill out forms themselves only for the government a few years later to say you did it wrong?
        toomuchtodo 6y ago
        Because some people are irrationally biased against government providing services or collecting taxes in general. These are ingrained belief systems being challenged.
        jaywalk 6y ago
        Ridiculous thing to say. I am a small government person, and I believe taxation is theft. However, I am a realist and so I recognize that taxes are part of our reality. I am 100% in favor of the IRS making it as easy as possible for people to do their taxes, because they already have 99% of the info needed.
- save_ferris 6y ago
  Even better, the think tank attached to the article you linked to has an article explicitly rejecting the idea of pre-filled tax returns for taxpayers.[0] So how exactly does Ted's plan to simplify the tax code have anything to do with filing in the first place if the organization you're backing up your argument with doesn't even support doing away with private tax prep? You think the tax code is gonna be simplified to the point that Intuit just lays down and says "welp, no more money to be made here, the market solved itself out of a revenue stream"? 0: https://taxfoundation.org/pre-filled-forms-solution-tax-compliance-costs/ https://taxfoundation.org/pre-filled-forms-solution-tax-comp...
- fyz 6y ago
  2017 story on how Intuit killed the ReadyReturn program for pre-calculated returns for California. https://priceonomics.com/the-stanford-professor-who-fought-the-tax-lobby/ https://priceonomics.com/the-stanford-professor-who-fought-t... https://www.npr.org/sections/money/2017/03/22/521132960/episode-760-tax-hero https://www.npr.org/sections/money/2017/03/22/521132960/epis...
- shados 6y ago
  There would be no problem with TurboTax if it was a product that solved a real problem. If the complexity of the tax code and the process to file your taxes were 100% a problem created by the federal government and the states. It works pretty well, it's not too expensive, it has free options, not what's to like? It isn't like that though. The IRS has nearly all the pieces it needs, if not all the pieces, to create a system like the UK, where they just send you your return and you sign it unless you think there's a mistake. But that system doesn't exist because of companies like Intuit who lobby hard to prevent it from existing. In essence, Turbotax is solving a problem that Intuit is creating (or at least lobby to prevent anyone from fixing it).
  - jeffbee 6y ago
    > The IRS has nearly all the pieces it needs Some things would need to change to make this statement true. Stock brokers and portfolio managers would have to be forced to stop reporting gains without basis. Without the basis the IRS has no idea what your gains were.
    - scott_s 6y ago
      Only about half of Americans have any investment in the stock market - and yes, that includes 401ks. That means more than half the population can file taxes without information from brokers or portfolio managers, which means not having that information is not a good reason to not do this.
      - jeffbee 6y ago
        For people with simple tax returns, aren't they already using the 1040 EZ? Doesn't seem like you'd use TurboTax unless you were itemizing or had a Sched. D to fill out.
        scott_s 6y ago
        For many years, I filled out a 1040 EZ, and I used TurboTax to do it. For me, it wasn't about ease of filling out my taxes, as they were trivial. It was about ease of filing my taxes, as it was all online and I didn't have to physically mail anything. So, yes, such people are already using the simplest possible form, but ease of filing is a big deal, and I suspect many people are like me and use online filing software for that just as much as ease of filling out the forms.
- syshum 6y ago
  I 100% agree, to bad all you will get in response to your comment is how it is evil companies that prevent the noble and universally good government from helping the people. Unfortunately very few people seem to understand that government, intrinsically, is inefficient and bad at everything it does. This can not be avoided or changed it is the natural state of a monopoly. They seem to be able to recognize that when a large corporation that has become monopoly that is bad for people, however they fail to recognize that government is the worst kind of monopoly as unlike a corporation, they have the legal authority to put you in a cage if you refuse them, and kill you if you resit the governments attempt to put you in that cage.
  - save_ferris 6y ago
    > Unfortunately very few people seem to understand that government, intrinsically, is inefficient and bad at everything it does. This is a laughably false statement. It's easy to find stories of government projects that came in ahead of schedule and under budget, but you have to look for them because those stories don't get nearly as much attention as the inverse. Take the Hoover Dam, for example. That was one of the most ambitious infrastructure projects in American history, and came in years ahead of schedule, and millions under budget.[0] Google around infrastructure publications and you'll find dozens more stories like this. To say that every thing a government does is bad is to fundamentally ignore reality, which is that no, not everything the government does is bad. You can never be taken seriously making sweeping generalizations like that. 0: https://www.marketplace.org/2010/05/28/why-we-might-not-have-built-hoover-dam-today/ https://www.marketplace.org/2010/05/28/why-we-might-not-have...
    - syshum 6y ago
      What is laughable if the fact you picked a make work jobs program like the Hover Damn to highlight government efficiency... The entire purpose of project was because the government needed to find something for thousands of unemployed men to do. It was literally the definition of "busy work" Further the budget was massively reduced because they did not have to concern themselves with minor things like environmental impact, or worker safety... I hope that is not your only shinning example of government as it is very much tarnished by the stain of blood
- milofeynman 6y ago
  The hate comes from anyone who understands intuit lobbying against the interest of the US taxpayer. Instead of the US government acting like every other 1st world government and giving us a pre-calculated tax bill since they already know what we owe we're forced to spend hours tracking down documents and hoping we didn't mess up and get audited. https://www.nytimes.com/2017/04/14/opinion/filing-taxes-in-japan-is-a-breeze-why-not-here.html https://www.nytimes.com/2017/04/14/opinion/filing-taxes-in-j...
  - vonmoltke 6y ago
    > Instead of the US government acting like every other 1st world government and giving us a pre-calculated tax bill since they already know what we owe They don't know what a given taxpayer owes. They can estimate based on various filings, but there is some stuff that is only reported by the taxpayer when filing. That said, it isn't an excuse to push all the work onto the taxpayer when almost all of what a typical taxpayer needs to fill out could be pre-populated. > we're forced to spend hours tracking down documents and hoping we didn't mess up and get audited That the IRS audits taxpayers is evidence that it doesn't ever conclusively know what some people were supposed to pay in a given year, let alone by 15APR of the following year.
- prepend 6y ago
  In addition to the lobbying activities that, naturally, garner hate, I dislike them for just being a crappy marketing-driven company that is constantly trying to up sell. I’ve used them for about 20 years and every year it’s a hassle to find a reasonable price, figure out what they call the product I need each year. I spend as much time trying to figure out what to buy and clicking “no” as I do filing my taxes. This is as a customer that uses them once a year and that’s it. If they just sold a clean product, then it would be fine. But they are asshole marketing / rent seeking quite a bit. Lots of non-savvy friends buy the $200 version instead of the free or $50 version because of the way intuit markets within their product about buying audit protection and what not. It also infuriates me that their boxes software costs less than the web site. I think companies that sell physical copies of software for less than the website version are jerks. Obviously, they can do this, it’s legal, and people fall for it. But I would feel bad doing this and I think anyone who does this is a bad person. Therefore, I hate intuit and will switch in an instant when I can.
- Izkata 6y ago
  > Perhaps energy should be directed at the actual tax code complexity rather than software built to help navigate filing. Two years ago the paper form for standard federal 1040 was cut to about 1/4th its previous length. It's happening, just slowly. (Yes, I still use the paper forms yearly for both federal and state. I've never seen any software as necessary for filing taxes...)
guerby 6y ago
In France you can fill your tax form online since 1999 https://fr.wikipedia.org/wiki/T%C3%A9l%C3%A9d%C3%A9claration_de_revenus https://fr.wikipedia.org/wiki/T%C3%A9l%C3%A9d%C3%A9claration... In the past years banks and companies give tax related information to the tax authority so for lots of people the online tax form is already 100% filled and correct. For the past year tax filling I just had to add to the web form renting income, tax deducible donations, and that was it.
- masklinn 6y ago
  I'd assume most european countries have had that for at least a decade e.g. Estonia's e-tax started in 2002, Belgium's tax-on-web in 2003.
- mulmen 6y ago
  How does France build these systems? Does the government itself have IT development resources or do they contract out to private industry?
  - Macha 6y ago
    Can't speak for France, but in Ireland this system has been in place since it was done on paper. Most (all?) IT work for the government is contracted out to private companies.
  - guerby 6y ago
    It depends a lot :). For the tax system it was developped with lots of free software, and support purchased to French IT companies. It was hosted on a big (for the time) linux server farm. Here are a few interviews and slides by the director of this project, unfortunately in French (didn't check automated translations, might work): https://www.toolinux.com/article/jean-marie-lapeyre-copernic-la https://www.toolinux.com/article/jean-marie-lapeyre-copernic... http://www.supelec-rennes.fr/sic/JOURNEES/05_10_20/lapeyre.pdf http://www.supelec-rennes.fr/sic/JOURNEES/05_10_20/lapeyre.p... The free software community in France was very happy to see one major ministry doing this kind of projects at the time.
- Macha 6y ago
gkfasdfasdf 6y ago
Obligatory mention of https://www.turbotaxsucksass.com/ https://www.turbotaxsucksass.com/, which takes you directly to real free file option of each major online tax prep site, bypassing all the misleading not-actually-free filing options that the sites loudly advertise.
- swiley 6y ago
  I thought the official IRS form filler was discontinued? Does this just take you to another intuit competitor? EDIT: it just sends you to the free version of turbo tax and has links for the competitors heh
  - masklinn 6y ago
    > I thought the official IRS form filler was discontinued? IRS's own service was discontinued after an agreement with tax preparation companies that they would provide such a service (the IRS Free File Program) if your AGI is below 69k (nice). Which they do, but try to hide as much as they can via negative SEO and various dark pattern, so that you unknowingly get directed towards "free" offers which quickly require you to pay. There's plenty of information all over the net. And I thought I remembered LWT doing an episode on that recently, but apparently it was Patriot Act… in what I now learn was the last episode, that would certainly explain why it's been so long I've seen an episode pop up in my feed.
    - pmiller2 6y ago
      Unfortunately, Patriot Act with Hasan Minhaj was canceled[0]. The last episode was June 28, 2020: "Why Doing Taxes Is So Hard" It's too bad. I thought it was a really worthwhile show. --- [0]: https://variety.com/2020/tv/news/hasan-minhaj-patriot-act-canceled-netflix-1234738562/ https://variety.com/2020/tv/news/hasan-minhaj-patriot-act-ca...
      - masklinn 6y ago
        Yes, that’s what I meant by “last episode”. I should probably have written “final” or “ultimate”.
ourmandave 6y ago
Ironically, for most people the IRS has a copy of most your forms (W2, 1099s, etc.) already and can do your taxes for you if you want.
- chungalunga 6y ago
  Yep, they’ll eventually send you a bill if you owe. For some strange reason they won’t send you a refund if you’re eligible.
  - commoner 6y ago
    Sometimes, the IRS identifies the overpayment and sends the taxpayer a CP268 notice. The taxpayer can choose to receive a check or a credit against other taxes. https://www.irs.gov/individuals/understanding-your-cp268-notice https://www.irs.gov/individuals/understanding-your-cp268-not...
- owenmarshall 6y ago
  I work and live in different states, but those states have a reciprocal agreement: any local taxes I pay to my employer's state are a credit for my home state income taxes. Last year a Turbotax glitch (combined with my inattentiveness!) accidentally marked my local taxes as belonging to my home state – this made it appear like I paid significantly too much for local taxes. I filed and happily but surprisingly expected a large refund. Instead, I received a more typical refund and a letter from the Dept. of Revenue showing that the state had amended my return to match their records and that no further action was required. My taxes could be this simple every time. What a bummer that they aren't.
  - ourmandave 6y ago
    I moved from IL to IA one year and had to file both states. I did it by hand and screwed up the IA one somehow. =( They eventually sent me the corrected form and a refund I was actually due. It was like drawing the Monopoly card "Bank error in your favor. Collect $200."
klmadfejno 6y ago
God I hope this suit is successful. Lots of people here are discussing the regulatory trap they've got, and that's a big problem. But the actual problem mentioned in the suit is deceptive marketing. TurboTax is the worst in this regard. Last year, I, at every step of the process, declined the expensive options that say "maybe you'll save more money if you permanently switch into this paid mode". Yet after a couple hours of filling out forms, they said at the end that it wasn't possible to file using the free version, and that I would have to pay a couple hundred dollars. That ticked me off. They have all of the information required to figure this out much earlier in the process (income), yet they continue to allow you to pick the free tier up until the very end where the tedium of starting over with a different service is too high. Fuck em. Their UI is very nice though, especially for guiding people through a process that they almost intrinsically hate.
- scott_s 6y ago
  > Their UI is very nice though, especially for guiding people through a process that they almost intrinsically hate. Which is evidence towards the idea that if they wanted to make choosing the free or paid versions easy and obvious which was best for each person, they could.
- c22 6y ago
  This happened to me too. I just printed out the return they generated and mailed it in myself. This is actually how tax preparation software used to always work and it definitely wasn't free back then.
  - Cactus2018 6y ago
    This year I was unable to get to the print-out without paying
    - tvb12 6y ago
      If I remember correctly, you have to go through the IRS freefile page (here: https://apps.irs.gov/app/freeFile/ https://apps.irs.gov/app/freeFile/) to get to the "real" free version of turbotax. The link to the "free edition" on the main page of their site, confusingly, is something else. Turbotax's income limit for free filing is really low, though. Max income of $36,000.
wffurr 6y ago
What's the least scammy alternative to TurboTax? I keep paying for it every year because it's what I'm used to, and I have capital gains and all that junk so I can't free file.
- Kalium 6y ago
  CreditKarma lets you file capital gains and so on for free.
  - adeledeweylopez 6y ago
    And they're getting bought by Intuit (TurboTax)...
  - mkskm 6y ago
    Make sure to opt out of personal info sharing before doing this. There's a subtle disclosure permitting selling info to affiliates before enrolling in their tax program that can be declined (it looks required at first glance but isn't).
- zie 6y ago
  You can pay a tax professional for about the $100 that turbo tax apparently charges. There is an OSS tax solver here: https://opentaxsolver.sourceforge.net/ https://opentaxsolver.sourceforge.net/ Only does IRS, not state, works fine for me so far.
  - Bedon292 6y ago
    For some reason that link doesn't work foe me (may be a DNS issue on my part). Appears to be here: https://sourceforge.net/projects/opentaxsolver/ https://sourceforge.net/projects/opentaxsolver/ And it does seem to have a few states, at least in text form.
  - tomjakubowski 6y ago
    The link needs http:// http:// to work. In 2020 Sourceforge doesn't host project webpages on https. http://opentaxsolver.sourceforge.net/ http://opentaxsolver.sourceforge.net/
spicymaki 6y ago
The government (IRS) gets most of the data and can make a reasonable tax estimate. They should send us a bill. This find the loophole game is really counter productive and time consuming.
supernova87a 6y ago
Why are we bothering with the small potatoes in the room (TurboTax not putting URLs to free tax filing, etc. etc) when the elephant is: "Why isn't the IRS giving people a way to prepopulate and file taxes for free with the financial info that the IRS already has on everyone?" Well, I suppose it's just a product of the corporate interests and congressional deadlock that prevents us from doing a multitude of things right now. Other countries manage to do this just fine.
- scott_s 6y ago
  Because we know the answer: the IRS is prevented from doing that by law. Lobbied by Intuit. If you google around, you can find stories on it. edit: save_ferris linked to an excellent story below: https://www.propublica.org/article/filing-taxes-could-be-free-simple-hr-block-intuit-lobbying-against-it https://www.propublica.org/article/filing-taxes-could-be-fre...
  - rootusrootus 6y ago
    Grover Norquist is probably more of the reason than Intuit.
  - dbalbright 6y ago
    Yep. One such story is a podcast episode from Planet Money 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...
  - apta 6y ago
    It's outright ludicrous how a private company is able to introduce a law that prevents a government agency from doing its job.
  - crispyporkbites 6y ago
    Ok so I don’t know much about the us legal and political system, but a couple of questions: - why does a judge in a lawsuit get to make the decision here? I.e. why is this kind of law not debated as part of public discourse and a decision made through a democratic path? - given this benefits a tiny fraction of people in the US, why doesn’t a particular party/politician take a stand on it as a policy to win a chunk of votes? For the first point, a UK former judge spoke extensively on the topic of the courts overstepping their remit as part of the 2019 Reith lectures: https://www.bbc.co.uk/programmes/m00057m8 https://www.bbc.co.uk/programmes/m00057m8
rietta 6y ago
I just buy one copy of TurboTax Home and Business each year and then everyone in my family uses it one at a time and free Federal efile. My parents both have different LLCs, I have a business, my sister has a business. We print and mail state returns because no reason to pay yet again for each State efile. I've become the defacto family accountant/keeper of tax file backups.
3327 6y ago
Finally. Turbotax is fraud on so many levels I cannot even get started.
sriram_sun 6y ago
Intuit has already done the math. The actual profits from this practice will far outweigh the ensuing fines with "No admission of wrongdoing".
knicholes 6y ago
From reading the comments here, it sounds like creating a great tax product that people could use for free would be a great way to get Intuit to acquire you.
coronadisaster 6y ago
I used H&R block the last few years and I feel like they also try to trick you into paying when you don't need to.
- wrycoder 6y ago
  I even felt that way with TaxAct recently.
ilaksh 6y ago
Personally I think that there needs to be fundamental structural tax reform. To the degree that Intuit's business model goes away. But Intuit probably owns all of the decision makers somehow. Which to me means that there needs to be radical government reform. I actually believe that government and money need to be radically modified and modernized.
dboreham 6y ago
Didn't donate enough campaign contributions?
isabelc 6y ago
I've been happy using express1040.com for 14 years. It's always easy, updated and free for federal filing.

463 points by justinpropub 6y ago

Not sure I understand the hate for TurboTax. Literally not a single person is forced to use it. I do use it and it's a very good product for the most part. Perhaps energy should be directed at the actual tax code complexity rather than software built to help navigate filing. Ted Cruz's tax plan would have practically eliminated the need for TurboTax-type software. https://taxfoundation.org/details-and-analysis-senator-ted-cruz-s-tax-plan/ https://taxfoundation.org/details-and-analysis-senator-ted-c... But, let's not forget what Milton Friedman had to say about tax reform: https://www.youtube.com/watch?v=TruCIPy79w8 https://www.youtube.com/watch?v=TruCIPy79w8

tekknolagi 6y ago
People hate TurboTax because Intuit spends obscene amounts of money lobbying to keep the tax code complicated so they have a market.
- masklinn 6y ago
  They also spend obscene amounts of money killing online filing being provided by either state or fed. They spent more than 1.2 million in direct lobbying against California's online tax preparation & declaration system pilot (ReadyReturn) between 2001 and 2010.
deleted 6y ago
[deleted]
save_ferris 6y ago
> Perhaps energy should be directed at the actual tax code complexity rather than software built to help navigate filing. It's hard to tackle the complexity of the tax code when the company you're defending here has spent millions to keep it complex and out of the hands of the government.[0] The "tax complexity" argument is a red herring when talking about tax prep. The US government could absolutely offer free tax filing services to taxpayers without the help of private industry and also without needing to simplify the tax code. I'm not saying that the complexity of the tax code isn't a problem, but it's out of scope here. The idea that the complexity of the US tax code standing in the way of better filing options for taxpayers has absolutely no merit when companies are spending millions to fight legislation that gives the government the ability to offer its own tax prep software. This is rent-seeking behavior on the part of private industry, plain and simple. 0: https://www.propublica.org/article/filing-taxes-could-be-free-simple-hr-block-intuit-lobbying-against-it https://www.propublica.org/article/filing-taxes-could-be-fre...
- StillBored 6y ago
  And just to add to this, the IRS software could be significantly easier to use than the commercial offerings. That is because they could pre-populate much of the W2/1099/stock sales/etc data since its all being reported to the IRS from other organizations. For the vast majority of people it could be as simple as logging into a web site and clicking "no" to a bunch of questions like "did you have more than 20k of medical bills last year", and then "I accept" at the bottom where it prints your final tax. As I understand it, that is how some other countries handle their taxes..
  - syshum 6y ago
    >>>And just to add to this, the IRS software could be significantly easier to use than the commercial offerings. Someone has never worked in government contracting or developing Software from Government Committee a IRS Tax Software would look more than the universally hated Unemployment Systems, or the government healthcare markets Not a easy to use streamline system If you want something to be inefficient, have the government do it
    - colejohnson66 6y ago
      Here’s the thing though: the IRS already has all the information they need for a majority of the population. Why does everyone need to fill out forms themselves only for the government a few years later to say you did it wrong?
      - toomuchtodo 6y ago
        Because some people are irrationally biased against government providing services or collecting taxes in general. These are ingrained belief systems being challenged.
        jaywalk 6y ago
        Ridiculous thing to say. I am a small government person, and I believe taxation is theft. However, I am a realist and so I recognize that taxes are part of our reality. I am 100% in favor of the IRS making it as easy as possible for people to do their taxes, because they already have 99% of the info needed.
save_ferris 6y ago
Even better, the think tank attached to the article you linked to has an article explicitly rejecting the idea of pre-filled tax returns for taxpayers.[0] So how exactly does Ted's plan to simplify the tax code have anything to do with filing in the first place if the organization you're backing up your argument with doesn't even support doing away with private tax prep? You think the tax code is gonna be simplified to the point that Intuit just lays down and says "welp, no more money to be made here, the market solved itself out of a revenue stream"? 0: https://taxfoundation.org/pre-filled-forms-solution-tax-compliance-costs/ https://taxfoundation.org/pre-filled-forms-solution-tax-comp...
fyz 6y ago
2017 story on how Intuit killed the ReadyReturn program for pre-calculated returns for California. https://priceonomics.com/the-stanford-professor-who-fought-the-tax-lobby/ https://priceonomics.com/the-stanford-professor-who-fought-t... https://www.npr.org/sections/money/2017/03/22/521132960/episode-760-tax-hero https://www.npr.org/sections/money/2017/03/22/521132960/epis...
shados 6y ago
There would be no problem with TurboTax if it was a product that solved a real problem. If the complexity of the tax code and the process to file your taxes were 100% a problem created by the federal government and the states. It works pretty well, it's not too expensive, it has free options, not what's to like? It isn't like that though. The IRS has nearly all the pieces it needs, if not all the pieces, to create a system like the UK, where they just send you your return and you sign it unless you think there's a mistake. But that system doesn't exist because of companies like Intuit who lobby hard to prevent it from existing. In essence, Turbotax is solving a problem that Intuit is creating (or at least lobby to prevent anyone from fixing it).
- jeffbee 6y ago
  > The IRS has nearly all the pieces it needs Some things would need to change to make this statement true. Stock brokers and portfolio managers would have to be forced to stop reporting gains without basis. Without the basis the IRS has no idea what your gains were.
  - scott_s 6y ago
    Only about half of Americans have any investment in the stock market - and yes, that includes 401ks. That means more than half the population can file taxes without information from brokers or portfolio managers, which means not having that information is not a good reason to not do this.
    - jeffbee 6y ago
      For people with simple tax returns, aren't they already using the 1040 EZ? Doesn't seem like you'd use TurboTax unless you were itemizing or had a Sched. D to fill out.
      - scott_s 6y ago
        For many years, I filled out a 1040 EZ, and I used TurboTax to do it. For me, it wasn't about ease of filling out my taxes, as they were trivial. It was about ease of filing my taxes, as it was all online and I didn't have to physically mail anything. So, yes, such people are already using the simplest possible form, but ease of filing is a big deal, and I suspect many people are like me and use online filing software for that just as much as ease of filling out the forms.
syshum 6y ago
I 100% agree, to bad all you will get in response to your comment is how it is evil companies that prevent the noble and universally good government from helping the people. Unfortunately very few people seem to understand that government, intrinsically, is inefficient and bad at everything it does. This can not be avoided or changed it is the natural state of a monopoly. They seem to be able to recognize that when a large corporation that has become monopoly that is bad for people, however they fail to recognize that government is the worst kind of monopoly as unlike a corporation, they have the legal authority to put you in a cage if you refuse them, and kill you if you resit the governments attempt to put you in that cage.
- save_ferris 6y ago
  > Unfortunately very few people seem to understand that government, intrinsically, is inefficient and bad at everything it does. This is a laughably false statement. It's easy to find stories of government projects that came in ahead of schedule and under budget, but you have to look for them because those stories don't get nearly as much attention as the inverse. Take the Hoover Dam, for example. That was one of the most ambitious infrastructure projects in American history, and came in years ahead of schedule, and millions under budget.[0] Google around infrastructure publications and you'll find dozens more stories like this. To say that every thing a government does is bad is to fundamentally ignore reality, which is that no, not everything the government does is bad. You can never be taken seriously making sweeping generalizations like that. 0: https://www.marketplace.org/2010/05/28/why-we-might-not-have-built-hoover-dam-today/ https://www.marketplace.org/2010/05/28/why-we-might-not-have...
  - syshum 6y ago
    What is laughable if the fact you picked a make work jobs program like the Hover Damn to highlight government efficiency... The entire purpose of project was because the government needed to find something for thousands of unemployed men to do. It was literally the definition of "busy work" Further the budget was massively reduced because they did not have to concern themselves with minor things like environmental impact, or worker safety... I hope that is not your only shinning example of government as it is very much tarnished by the stain of blood
milofeynman 6y ago
The hate comes from anyone who understands intuit lobbying against the interest of the US taxpayer. Instead of the US government acting like every other 1st world government and giving us a pre-calculated tax bill since they already know what we owe we're forced to spend hours tracking down documents and hoping we didn't mess up and get audited. https://www.nytimes.com/2017/04/14/opinion/filing-taxes-in-japan-is-a-breeze-why-not-here.html https://www.nytimes.com/2017/04/14/opinion/filing-taxes-in-j...
- vonmoltke 6y ago
  > Instead of the US government acting like every other 1st world government and giving us a pre-calculated tax bill since they already know what we owe They don't know what a given taxpayer owes. They can estimate based on various filings, but there is some stuff that is only reported by the taxpayer when filing. That said, it isn't an excuse to push all the work onto the taxpayer when almost all of what a typical taxpayer needs to fill out could be pre-populated. > we're forced to spend hours tracking down documents and hoping we didn't mess up and get audited That the IRS audits taxpayers is evidence that it doesn't ever conclusively know what some people were supposed to pay in a given year, let alone by 15APR of the following year.
prepend 6y ago
In addition to the lobbying activities that, naturally, garner hate, I dislike them for just being a crappy marketing-driven company that is constantly trying to up sell. I’ve used them for about 20 years and every year it’s a hassle to find a reasonable price, figure out what they call the product I need each year. I spend as much time trying to figure out what to buy and clicking “no” as I do filing my taxes. This is as a customer that uses them once a year and that’s it. If they just sold a clean product, then it would be fine. But they are asshole marketing / rent seeking quite a bit. Lots of non-savvy friends buy the $200 version instead of the free or $50 version because of the way intuit markets within their product about buying audit protection and what not. It also infuriates me that their boxes software costs less than the web site. I think companies that sell physical copies of software for less than the website version are jerks. Obviously, they can do this, it’s legal, and people fall for it. But I would feel bad doing this and I think anyone who does this is a bad person. Therefore, I hate intuit and will switch in an instant when I can.
Izkata 6y ago
> Perhaps energy should be directed at the actual tax code complexity rather than software built to help navigate filing. Two years ago the paper form for standard federal 1040 was cut to about 1/4th its previous length. It's happening, just slowly. (Yes, I still use the paper forms yearly for both federal and state. I've never seen any software as necessary for filing taxes...)

guerby 6y ago

In France you can fill your tax form online since 1999 https://fr.wikipedia.org/wiki/T%C3%A9l%C3%A9d%C3%A9claration_de_revenus https://fr.wikipedia.org/wiki/T%C3%A9l%C3%A9d%C3%A9claration... In the past years banks and companies give tax related information to the tax authority so for lots of people the online tax form is already 100% filled and correct. For the past year tax filling I just had to add to the web form renting income, tax deducible donations, and that was it.

masklinn 6y ago
I'd assume most european countries have had that for at least a decade e.g. Estonia's e-tax started in 2002, Belgium's tax-on-web in 2003.
mulmen 6y ago
How does France build these systems? Does the government itself have IT development resources or do they contract out to private industry?
- Macha 6y ago
  Can't speak for France, but in Ireland this system has been in place since it was done on paper. Most (all?) IT work for the government is contracted out to private companies.
- guerby 6y ago
  It depends a lot :). For the tax system it was developped with lots of free software, and support purchased to French IT companies. It was hosted on a big (for the time) linux server farm. Here are a few interviews and slides by the director of this project, unfortunately in French (didn't check automated translations, might work): https://www.toolinux.com/article/jean-marie-lapeyre-copernic-la https://www.toolinux.com/article/jean-marie-lapeyre-copernic... http://www.supelec-rennes.fr/sic/JOURNEES/05_10_20/lapeyre.pdf http://www.supelec-rennes.fr/sic/JOURNEES/05_10_20/lapeyre.p... The free software community in France was very happy to see one major ministry doing this kind of projects at the time.
Macha 6y ago

gkfasdfasdf 6y ago

Obligatory mention of https://www.turbotaxsucksass.com/ https://www.turbotaxsucksass.com/, which takes you directly to real free file option of each major online tax prep site, bypassing all the misleading not-actually-free filing options that the sites loudly advertise.

swiley 6y ago
I thought the official IRS form filler was discontinued? Does this just take you to another intuit competitor? EDIT: it just sends you to the free version of turbo tax and has links for the competitors heh
- masklinn 6y ago
  > I thought the official IRS form filler was discontinued? IRS's own service was discontinued after an agreement with tax preparation companies that they would provide such a service (the IRS Free File Program) if your AGI is below 69k (nice). Which they do, but try to hide as much as they can via negative SEO and various dark pattern, so that you unknowingly get directed towards "free" offers which quickly require you to pay. There's plenty of information all over the net. And I thought I remembered LWT doing an episode on that recently, but apparently it was Patriot Act… in what I now learn was the last episode, that would certainly explain why it's been so long I've seen an episode pop up in my feed.
  - pmiller2 6y ago
    Unfortunately, Patriot Act with Hasan Minhaj was canceled[0]. The last episode was June 28, 2020: "Why Doing Taxes Is So Hard" It's too bad. I thought it was a really worthwhile show. --- [0]: https://variety.com/2020/tv/news/hasan-minhaj-patriot-act-canceled-netflix-1234738562/ https://variety.com/2020/tv/news/hasan-minhaj-patriot-act-ca...
    - masklinn 6y ago
      Yes, that’s what I meant by “last episode”. I should probably have written “final” or “ultimate”.

ourmandave 6y ago

Ironically, for most people the IRS has a copy of most your forms (W2, 1099s, etc.) already and can do your taxes for you if you want.

chungalunga 6y ago
Yep, they’ll eventually send you a bill if you owe. For some strange reason they won’t send you a refund if you’re eligible.
- commoner 6y ago
  Sometimes, the IRS identifies the overpayment and sends the taxpayer a CP268 notice. The taxpayer can choose to receive a check or a credit against other taxes. https://www.irs.gov/individuals/understanding-your-cp268-notice https://www.irs.gov/individuals/understanding-your-cp268-not...
owenmarshall 6y ago
I work and live in different states, but those states have a reciprocal agreement: any local taxes I pay to my employer's state are a credit for my home state income taxes. Last year a Turbotax glitch (combined with my inattentiveness!) accidentally marked my local taxes as belonging to my home state – this made it appear like I paid significantly too much for local taxes. I filed and happily but surprisingly expected a large refund. Instead, I received a more typical refund and a letter from the Dept. of Revenue showing that the state had amended my return to match their records and that no further action was required. My taxes could be this simple every time. What a bummer that they aren't.
- ourmandave 6y ago
  I moved from IL to IA one year and had to file both states. I did it by hand and screwed up the IA one somehow. =( They eventually sent me the corrected form and a refund I was actually due. It was like drawing the Monopoly card "Bank error in your favor. Collect $200."

klmadfejno 6y ago

God I hope this suit is successful. Lots of people here are discussing the regulatory trap they've got, and that's a big problem. But the actual problem mentioned in the suit is deceptive marketing. TurboTax is the worst in this regard. Last year, I, at every step of the process, declined the expensive options that say "maybe you'll save more money if you permanently switch into this paid mode". Yet after a couple hours of filling out forms, they said at the end that it wasn't possible to file using the free version, and that I would have to pay a couple hundred dollars. That ticked me off. They have all of the information required to figure this out much earlier in the process (income), yet they continue to allow you to pick the free tier up until the very end where the tedium of starting over with a different service is too high. Fuck em. Their UI is very nice though, especially for guiding people through a process that they almost intrinsically hate.

scott_s 6y ago
> Their UI is very nice though, especially for guiding people through a process that they almost intrinsically hate. Which is evidence towards the idea that if they wanted to make choosing the free or paid versions easy and obvious which was best for each person, they could.
c22 6y ago
This happened to me too. I just printed out the return they generated and mailed it in myself. This is actually how tax preparation software used to always work and it definitely wasn't free back then.
- Cactus2018 6y ago
  This year I was unable to get to the print-out without paying
  - tvb12 6y ago
    If I remember correctly, you have to go through the IRS freefile page (here: https://apps.irs.gov/app/freeFile/ https://apps.irs.gov/app/freeFile/) to get to the "real" free version of turbotax. The link to the "free edition" on the main page of their site, confusingly, is something else. Turbotax's income limit for free filing is really low, though. Max income of $36,000.

wffurr 6y ago

What's the least scammy alternative to TurboTax? I keep paying for it every year because it's what I'm used to, and I have capital gains and all that junk so I can't free file.

Kalium 6y ago
CreditKarma lets you file capital gains and so on for free.
- adeledeweylopez 6y ago
  And they're getting bought by Intuit (TurboTax)...
- mkskm 6y ago
  Make sure to opt out of personal info sharing before doing this. There's a subtle disclosure permitting selling info to affiliates before enrolling in their tax program that can be declined (it looks required at first glance but isn't).
zie 6y ago
You can pay a tax professional for about the $100 that turbo tax apparently charges. There is an OSS tax solver here: https://opentaxsolver.sourceforge.net/ https://opentaxsolver.sourceforge.net/ Only does IRS, not state, works fine for me so far.
- Bedon292 6y ago
  For some reason that link doesn't work foe me (may be a DNS issue on my part). Appears to be here: https://sourceforge.net/projects/opentaxsolver/ https://sourceforge.net/projects/opentaxsolver/ And it does seem to have a few states, at least in text form.
- tomjakubowski 6y ago
  The link needs http:// http:// to work. In 2020 Sourceforge doesn't host project webpages on https. http://opentaxsolver.sourceforge.net/ http://opentaxsolver.sourceforge.net/

spicymaki 6y ago

The government (IRS) gets most of the data and can make a reasonable tax estimate. They should send us a bill. This find the loophole game is really counter productive and time consuming.

supernova87a 6y ago

Why are we bothering with the small potatoes in the room (TurboTax not putting URLs to free tax filing, etc. etc) when the elephant is: "Why isn't the IRS giving people a way to prepopulate and file taxes for free with the financial info that the IRS already has on everyone?" Well, I suppose it's just a product of the corporate interests and congressional deadlock that prevents us from doing a multitude of things right now. Other countries manage to do this just fine.

scott_s 6y ago
Because we know the answer: the IRS is prevented from doing that by law. Lobbied by Intuit. If you google around, you can find stories on it. edit: save_ferris linked to an excellent story below: https://www.propublica.org/article/filing-taxes-could-be-free-simple-hr-block-intuit-lobbying-against-it https://www.propublica.org/article/filing-taxes-could-be-fre...
- rootusrootus 6y ago
  Grover Norquist is probably more of the reason than Intuit.
- dbalbright 6y ago
  Yep. One such story is a podcast episode from Planet Money 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...
- apta 6y ago
  It's outright ludicrous how a private company is able to introduce a law that prevents a government agency from doing its job.
- crispyporkbites 6y ago
  Ok so I don’t know much about the us legal and political system, but a couple of questions: - why does a judge in a lawsuit get to make the decision here? I.e. why is this kind of law not debated as part of public discourse and a decision made through a democratic path? - given this benefits a tiny fraction of people in the US, why doesn’t a particular party/politician take a stand on it as a policy to win a chunk of votes? For the first point, a UK former judge spoke extensively on the topic of the courts overstepping their remit as part of the 2019 Reith lectures: https://www.bbc.co.uk/programmes/m00057m8 https://www.bbc.co.uk/programmes/m00057m8

rietta 6y ago

I just buy one copy of TurboTax Home and Business each year and then everyone in my family uses it one at a time and free Federal efile. My parents both have different LLCs, I have a business, my sister has a business. We print and mail state returns because no reason to pay yet again for each State efile. I've become the defacto family accountant/keeper of tax file backups.

3327 6y ago

Finally. Turbotax is fraud on so many levels I cannot even get started.

sriram_sun 6y ago

Intuit has already done the math. The actual profits from this practice will far outweigh the ensuing fines with "No admission of wrongdoing".

knicholes 6y ago

From reading the comments here, it sounds like creating a great tax product that people could use for free would be a great way to get Intuit to acquire you.

coronadisaster 6y ago

I used H&R block the last few years and I feel like they also try to trick you into paying when you don't need to.

wrycoder 6y ago
I even felt that way with TaxAct recently.

ilaksh 6y ago

Personally I think that there needs to be fundamental structural tax reform. To the degree that Intuit's business model goes away. But Intuit probably owns all of the decision makers somehow. Which to me means that there needs to be radical government reform. I actually believe that government and money need to be radically modified and modernized.

dboreham 6y ago

Didn't donate enough campaign contributions?

isabelc 6y ago

I've been happy using express1040.com for 14 years. It's always easy, updated and free for federal filing.