FTC sues Intuit for its deceptive TurboTax “free” filing campaign

FTC sues Intuit for its deceptive TurboTax “free” filing campaign(ftc.gov)

1552 points by Kesseki 4 years ago | 588 comments

dang 4 years ago |

https://storage.courtlistener.com/recap/gov.uscourts.cand.39...

https://arstechnica.com/tech-policy/2022/03/turbotax-maker-s... (via https://news.ycombinator.com/item?id=30846884, but we've merged the threads)

zw123456 4 years ago |

A few years back I got audited, and it was called an "electronic audit" by the IRS. Which basically meant that they had their computer systems scour a bunch of the bank records and discovered that I had forgotten to claim a 1099 for some contract work I had. OK, so they sent me a computer print out and they had cross checked everything on my return electronically, my property tax deductions, my stock dividends so on and so on.

Ok, so if they can do all that automatically for an "electronic audit" why am I filing a return, just run that thing and send it to me and I can file an exception if there is something on it I disagree with.

I think the answer has already been identified in several other comments here, a heavy lobby effort on the part of Intuit, H&R and whoever else to keep it tricky and complex so you have to buy their B.S> software or services.

nathancahill 4 years ago | |

Government: You owe us money. It’s called taxes.

Me: How much do I owe?

Gov’t: You have to figure that out.

Me: I just pay what I want?

Gov’t: Oh, no we know exactly how much you owe. But you have to guess that number too.

Me: What if I get it wrong?

Gov’t: You go to prison

Source: https://twitter.com/jordan_stratton/status/11181414550616719...

I dig this one up every April.

softveda 4 years ago | | |

This is how is works in Australia. The Australian Tax Office will pre-fill your tax return online with income from your wages, interests, managed fund distributions, dividends etc. That maybe enough for simple tax returns, you can just accept their values and submit.

What they don't know is your income from sources like rental income or crypto. They also don't know deductions you are going to claim. In this case you will have to provide the details. Still free to lodge your returns online.

btgeekboy 4 years ago | | |

It’s a nice, if overly simplistic sentiment.

It’d be nice if my 1099s were electronically filed with the cost basis. But they’re not. So the IRS, every year, thinks I’m going to owe way more than I do.

The IRS also has zero idea about the $4000+ of sales tax deductions I’m filing for this year.

And finally, if you do get it wrong, you don’t go to jail. They send you a CP2000 letter. (Remember those 1099s? I forgot one one year.) You fix the problem or show them their error. They’ll even waive the penalties the first time. It’s a somewhat easy process.

singron 4 years ago | | |

Obviously it's a joke, but if you get it wrong, they send you the right amount and then you pay it (or they pay you). As long as you are close with your on-time payment, the interest is very reasonable on small differences. It's probably cheaper than paying for turbotax if you would have to pay for that.

randmeerkat 4 years ago | | |

What’s crazy is that unreasonable taxes is one of the main reasons _why_ the British settlers rebelled against the Crown and went on to found America. The fact that nearly 250 years later we have an absurd, convoluted tax system, that literally requires specialists and companies with absurd market caps, for example Intuit has a $137B market cap, shows just how broken the system has become.

supramouse 4 years ago | | |

you don't really go to prison unless you're going out of you way to do something really nefarious

it's also super easy to setup a payment plan online now if you really mess things up

zw123456 4 years ago | | |

ya, so why not just send me a statement once a month, the power company does that, the cell phone company does that, the city I live in does that, etc.

Just send me a statement, you made this, you get this much deduction for the other crap or whatever.

No stupid W2, W4 1040, bunch of mumbo jumbo from the 1950's that a few companies are ripping us off over IMO.

blowski 4 years ago | | |

In the UK, I’m told how much I owe. A year later, I get fined because they told me the wrong amount.

aj7 4 years ago | | |

You do not have to guess “what the government knows.” Download your income transcript. See the “methodology” I replied above in response to this comment.

makeitdouble 4 years ago | | |

The alternative is:

Gov’t: You owe us money. We took the amount we want directly from your income.

Me: But shouldn't the amount be lower because of X and Y and Z ?

Gov’t: Send us all the right paperwork and we might give you back some of what we took if we agree with your claim.

I actually like this version better (and it's also what I am used to), but I'd see people being uncomfortable with that arrangement.

MisterTea 4 years ago | | |

The best part is your employer already sent them the income tax money you owe them but you still have to tell them how much money someone else gave them. Its an absurdly brain damaged system.

matheusmoreira 4 years ago | | |

Having to spend our own time, money and effort in order to work out how much money we have to pay the government for their crappy low quality services. Just yet another humiliation the government imposes on citizens.

creakingstairs 4 years ago | |

They've even done a pilot program that literally did what you wanted. [1] And yes, it was much better experience:

> Almost all participants said that they would opt to use the service the following year.

And yes, as you have said, the answer is lobbying.

> Tax preparation services strongly opposed ReadyReturn and have lobbied against its expansion.

[1] https://www.taxpolicycenter.org/briefing-book/what-was-exper....

EDIT: I can't find the podcast I heard this in, but pretty sure the tax professor that spearheaded this pilot got followed by people hired by Intuit.

exolymph 4 years ago | | |

The podcast might have been Planet Money: https://www.npr.org/sections/money/2017/03/22/521132960/epis...

Priceonomics wrote an accompanying article: https://priceonomics.com/the-stanford-professor-who-fought-t...

Griffinsauce 4 years ago | | |

> EDIT: I can't find the podcast I heard this in, but pretty sure the tax professor that spearheaded this pilot got followed by people hired by Intuit.

This feels somehow like it should be illegal to willfully and knowingly make the common good worse in favor of your company. Perhaps via antitrust.

ehsankia 4 years ago | |

It's well known fact that the government can auto-file for most people, it's not really a secret. Many other countries do it, it's been proven to work just fine.

gramie 4 years ago | | |

In Canada, when I file my taxes electronically, all my income (salary, interest, etc.) is pre-filled. I basically enter my deductions and hit "Submit".

Cthulhu_ 4 years ago | | |

That's just it, when I do my annual taxes (I should do that within the next month btw), all the data - from my employer's wages, all assets at banks including checking-, saving- and investment accounts, and things like mortgage interest (which is still partially deductible) etc are all filed.

The only thing I need to manually add is the EUR value of crypto assets on Jan 1st of the preceding year (good luck figuring that one out, the exchanges are kinda shit), and any charity donations I may have done. (my dad will pettily write down any speeding ticket cost as charity donations)

jazzyjackson 4 years ago | | |

how could America claim to be exceptional if we just did things the same way as every other developed nation? /s

KennyBlanken 4 years ago | | |

The IRS can't even handle people e-filing.

But don't worry, the project started in 2009 to replace their COBOL mainframe systems is kinda, sorta on track for completion...in 2030.

dguest 4 years ago | |

I know people who have optimized this:

- they fill out their taxes with rough estimates,

- the IRS helpfully corrects their errors, and sends the form back

- they sign the corrected form, send it back

- the IRS accepts the second round.

This is basically the same "pre-filled" workflow as every other developed country. The difference is that we have a first round where you put in a semi-plausible effort to placate the tax preparation lobby.

Has anyone with a normal job (not self-employed, regular paycheck from a company registered with the IRS) ever been fined etc for this?

legalcorrection 4 years ago | | |

Beware: if you owe the government money due to your mistakes, you will have to pay penalties and interest.

moduspol 4 years ago | |

I had the same situation once (a missed 1099) and my biggest complaint is that they waited almost a year to let me know. And of course by then it was quite late so I owed them even more money!

Even if they can't tell me what numbers they expect when I file, it seems like they could at least let me know within a few weeks if they're pretty sure I missed a 1099. Heck, I typically file at least a month early. They could let me know before April 15 and I could have just fixed it! Ugh.

zw123456 4 years ago | | |

Exactly my complaint as well!

They could send me a monthly statement like my city government does. Instead, they wait a year to let me know I slipped up and then charge me interest. Guys, if you know I slipped up now you could have told me a year ago.

pabs3 4 years ago | |

Are there any folks in congress who are interested in mandating the IRS switch to automatic tax returns or automated tax return form data filling?

webinvest 4 years ago | |

The thinking is that the more painful filing your taxes is, the more people will have a negative perception of taxes in general and be opposed to tax increases.

There was an interesting Planet Money episode about this [0].

[0] https://www.npr.org/sections/money/2017/03/22/52

swozey 4 years ago | |

I have a $165k notice of defiecency bill from the IRS due next month that is a complete joke that I have had to spend days figuring out. I almost dropped thousands on a lawyer for it until I understood Tax Court better.

Why? They think I sold a house and kept all of the gains. Like I didn't have a mortgage, and like it wasn't my primary residence.

It's ridiculous. I can't explain how stressed out getting a $165k bill when that's practically my yearly income made me. I wonder how many wealthy people get these completely incorrect $165k bills and how often they come after the person with $10k in the bank.

rossjudson 4 years ago | | |

I highly recommend that you keep everything related to this, securely, for several years even after it is resolved.

State governments are not necessarily believing the same set of facts that the federal government does. I got caught in a multi-year cycle one time where the state government kept coming after me every year for the same thing, even though I had the federal return and the evidence that it was correct.

Each year I'd send that thing in, in response, and I'd never hear from them...until the next year, when they'd do it again.

Felt to me like each year somebody would receive my response, decide it was too much work to deal with, and then file it away in the "hit them again next year" pile.

toast0 4 years ago | | |

Did you report the sale? When I sold my primary residence in 2018, it ended up on Schedule D and Form 8949, and there were no questions asked. The IRS does have a tendency to assume zero basis when there's a capital sale reported to them that doesn't appear in the tax return; which makes for scary bills, but can usually be resolved by reporting the sale and your basis on the appropriate form. (although I see from further replies that you are now having to deal with this in Tax Court, so that sounds like a terrible time, and I'm sorry for your tedium)

JSavageOne 4 years ago | |

Blaming "lobbyists" absolves the politicians of their responsibility. The fault lies with the politicians for creating and perpetuating this broken system.

Johnny555 4 years ago | |

they had their computer systems scour a bunch of the bank records and discovered that I had forgotten to claim a 1099

I assumed they did that automatically for everyone -- does that mean that if I "forget" to attach a 1099 then they IRS won't know unless they do this special "electronic audit"?

NovemberWhiskey 4 years ago | | |

I don't think that's actually how this works - most times when you get a 1099, the issuer is also required to file a copy with the IRS. As such - no bank account scanning required.

dehrmann 4 years ago | | |

At some point this becomes a Fourth Amendment violation, so that might prevent the IRS from doing it.

ryathal 4 years ago | | |

pretty sure everyone gets an "electronic audit." It's really just a check to see if you claimed all the income that others claimed they gave you.

Griffinsauce 4 years ago | |

This is literally how it works here in the Netherlands.

Every year I get a reminder, log into an app with my government ID, click "next" a few times while checking the numbers and submit. It literally takes 2 minutes if you don't have anything to adjust.

does the US have a thing like DigiD?

masklinn 4 years ago | | |

> does the US have a thing like DigiD?

Gods no, can you imagine the US having a national, universal, secure digital ID?

jrochkind1 4 years ago | |

That is in fact how it works in many (most?) countries.

https://www.pbs.org/newshour/show/dreading-taxes-countries-s...

aj7 4 years ago | |

Methodology: 1) Download your income transcript from the IRS using your IRS account. 2) Make sure all claimed income on the transcript is included. 3) Do the puzzle. 4) Print and file.

Be sure you have a copy, either scanned or electronic, of all documents on your computer. Ditto all tax return filled in forms. Use the fill-in pdf’s the IRS provides.

Do not miss a filing date. File a tax return missing important documentation if necessary, but file. Similarly, pay the tax you owe, or estimate you owe on time. The penalties for late filing and owed taxes are severe. You will not make a serious error if you work from the income transcript.

ryathal 4 years ago | | |

To add to this even if you can't pay, still file your taxes. It's so much better to only be on the hook for not paying than both not paying and not filing.

refurb 4 years ago | |

It's impossible to automate the tax filing process unless you simplify the tax code.

And I've filed taxes in countries with simple tax codes where the government pre-fills out the forms. Guess what? You still need to go and double check everything because the information comes from your employer. I've found mistakes before. So I pretty much "do my taxes" myself to make sure what the govt sends isn't wrong.

Spivak 4 years ago | | |

This is a misunderstanding of the actual ask from the federal government and "automating" is a bit of a misnomer. The reason the IRS could theoretically fill out your taxes on your behalf is because someone else already submitted their part of the forms. Your employer reports your income, your broker reports your capital gains and assets, your bank reports interest, etc.. The ask is less about automation more not having to do those parts twice. The IRS could send you everything they've gotten about you and you just fill in the rest and/or dispute -- for normal single income wage earners there would be nothing else to add so it's effectively automated.

The gain is that we can make "doing your taxes" a non-issue for most Americans. Sure some people will still need accountants for complicated situations but in one swoop we can eliminate hundreds of millions of hours of useless work every year for basically no downside -- it's pure gravy.

AnIdiotOnTheNet 4 years ago | |

It isn't just the lobbyists, certain ideologically anti-tax politicians desperately want their constituents to think of taxes as a Great Evil perpetrated upon them so they can present themselves as the solution. Making the process as much of a pain in the ass as they can is part of their reelection strategy.

Iv 4 years ago | |

> Ok, so if they can do all that automatically for an "electronic audit" why am I filing a return, just run that thing and send it to me and I can file an exception if there is something on it I disagree with.

That's how it worked for me in France when I was an employee. As a freelancer there is a bit more work, but nothing like the puzzle that tax declaration seems to be in the US.

neilfrndes 4 years ago | |

This NPR planet money episode explains why tax filing is still the way it is: https://www.npr.org/sections/money/2019/04/03/709656642/epis...

pfundstein 4 years ago | |

> just run that thing and send it to me and I can file an exception if there is something on it I disagree with.

This is how it works in Australia. Taxes are filed online with the government authority (ATO), and everything is pre-filled. You just need verify it's correct and make any claims you want.

markdown 4 years ago | |

Most people in my country never have to file tax returns. Their taxes are deducted at source (by their employer).

masklinn 4 years ago | | |

In every country I know where taxes are collected by the employer you still have to file, to square things up and settle the tax bill (often you’ll get some money back, if you have other sources of income then you may have to pay taxes on those instead).

adreamingsoul 4 years ago | |

This happened to me, except the IRS calculated that I owed an additional 5-figure sum. not all information is sent to the IRS and they don’t yet have a way to determine a person’s situation. In my case, a form was missing from my filing that provided that context.

cyanydeez 4 years ago | |

Republicans want you to hate paying taxes and tax providers are greedy.

pc86 4 years ago | |

Lobby certainly doesn't help but "just tell me what I owe" is not practical or possible, and is an overly simplistic view of everything about the system. Most importantly, the 1099 your client filed telling them you got paid more than $600 was due the same time your taxes were due, so they didn't know about it until after the fact.

The feds have no idea how your deductions (and to a lesser extent, your income) have changed from the previous year. They don't have a full picture of your finances, but you do. In the abstract, with those constraints, the system of "tell us everything we need to know, pay us, and you get in trouble if you lie so egregiously that you get caught" works pretty well.

mlyle 4 years ago | | |

> but "just tell me what I owe" is not practical or possible

Note that there's a whole lot of countries that send you a prepared tax return that you adjust if necessary, and most people don't need to. There's no fundamental reason we couldn't do this here.

Indeed, California even did it for a couple years: https://www.taxpolicycenter.org/briefing-book/what-was-exper...

shados 4 years ago | | |

A pretty damn large portion of people claim the standard deduction. They are paid on W2. Their investments are on 1099s. The cost basis are in supplemental documents that could easily be provided to the IRS in a format they can handle.

Yeah, it doesn't work for everyone. So they could offer it to you, and you have the choice to click "ok", or to click "add additional income and deduction". If your situation is so crazy that neither of those options work, you can then do it the classic/hard mode way with an accountant.

It's how it works in plenty of countries. The US is a bit unique with one of the more complex tax code in the world, but it would still work fine for a large portion of the population.

jefftk 4 years ago | | |

This is how taxes work in many other countries, and it's how taxes could work here if we were willing to make minor changes. For example, adjusting the deadlines you mention to be sequential would not be a hard change.

eyelidlessness 4 years ago | | |

How is it not obvious this is a system designed for abuse favoring the most privileged abusers?

aidangrimshaw 4 years ago |

I'm working with other contributors on https://ustaxes.org, an open source tax filing webapp https://github.com/ustaxes/UsTaxes.

Currently, many Federal tax forms are supported, as well as tax filing for the state of Illinois. Filing for Oregon and California is under development!

mywittyname 4 years ago |

I found out from a friend that she paid $600 to have her taxes done because (presumably) she falls for the dark patterns that TurboTax uses. She's a low paid service worker whose tax return can probably be done for free. And it is a sizable portion of her income because of things like Earned income tax credits, child tax credits, etc.

Fuck these companies.

belval 4 years ago |

I know that ship has sailed, but I really wish politicians would go back to making promises that have an impact on everyone like abolishing tax fillings.

It might be different in the US, but in Canada I file my taxes using the CRA's data directly. TurboTax even fetches it directly from their website. What's the point? They have my T4, my T2202 (studies) and everything else. Just send me a letter telling me how much money I owe/I am owed and that's it.

perardi 4 years ago |

I know, I know, there’s so many dark patterns in TurboTax that it’s cliche to point them out…

…but man, this was a particularly egregious example I came across this year.

https://imgur.com/ojpLvRW

You can pay for TurboTax using your refund…with an additional $39 processing fee. That is just wild.

jackson1442 4 years ago | |

I think that's actually somewhat standard- even FreeTaxUSA (my personal choice) does this because they're essentially letting you use their product on credit.

deathanatos 4 years ago | | |

I think the objection is not that they're charging a fee, it's that the fee is $39. TurboTax (just the basic federal edition) is what, $30? And yes, this is essentially credit, extended for what, a month? So ($39/$30 * 12) is yearly rate of like 1,560% for that credit, aka., highway robbery — that, I think, is the parent's point.

(I might be a bit off on the price, but not enough to change the result. TurboTax's loss if the debtor here "defaults" somehow is … what, even?)

pvarangot 4 years ago | | |

FreeTaxUSA charges 19.90 for that, so still 20 bucks cheaper than TurboTax

lozenge 4 years ago | | |

It's not a good way to present the option. Should be a radio button "Pay with refund (fee: $39)"

quickthrower2 4 years ago | |

That is a payday loan that has 100% AAA collateral at loan shark rates, on a system that you are trusting like your dentist to do the right thing. Nice.

rudedogg 4 years ago | |

I like how the content and actions/buttons are in the opposite order too.

jader201 4 years ago | | |

I guess? But I think it would also be weird to have the “Pay Now” button right below the content for “Pay with Refund” (and then the “Pay with Refund” button below that one).

I mean, ideally the buttons would be immediately below the corresponding content.

But if both buttons are going to be at the bottom, I can see arguments for either order.

sofixa 4 years ago |

As i mentioned on another thread[1], that's one of those American things that really don't make any sense after spending more than a few seconds about it. There is no legitimate excuse for things to be this bad. The best I've heard is that paying taxes being hard is good because it reminds you how much money you give the government, so you are more attentive how it's spent, but it doesn't really make sense either.

https://news.ycombinator.com/item?id=30842175

foxyv 4 years ago |

Did my taxes this year using TurboTax like always. Sold some stocks this year and all of a sudden I am paying $90 for TurboTax "Premium" to put a couple additional entries in the 1040. What a racket. Next year I'm going to file using something else. This has gone on too long.

Arubis 4 years ago |

Good. Fuck them and their predatory business model.

I know this is where we’re supposed to decry the system of which this is symptomatic, and talk about campaign finance and such. And all that stuff is true, sure. But Intuit has been such a consistently abusive actor that they’re normalizing regulatory capture, with enormous financial, time, stress, and legal repercussions for the entire population.

Seriously, fuck them.

markc 4 years ago |

I was 80% done with my taxes this year when TT suddenly demanded an additional $119 to list deductible expenses on income. That’s on top of $140 to file Federal plus 1 state. I’ve been using TT for 20 years. Never again.

mynameisash 4 years ago | |

I'm not confident in my ability to get my taxes right (mostly due to my wife and I having owned small businesses plus my day job's stock awards and ESPP), so I've paid a local CPA to do our taxes for years now. He always did an incredible job, was happy to answer my questions for me (tax-related or not), helped us refi our house at an amazing price, and so on. His fees were something on the order of $400 or maybe even as high as $600 some years. But [a] I knew he always had our back, [b] his services partially or entirely paid for themselves in savings I probably wouldn't have caught, and [c] I was paying an individual who earned his keep as compared to a company like Intuit.

zentiggr 4 years ago | | |

Your situation sounds like one that a CPA would be perfect for - especially with business taxes involved.

Our household has just the basic salaries / expenses / 401k / IRAs. THe year I received some temporary additional benefits, Intuit decided that I had to pay premium in order to enter that single additional 1099.

I left, found a much simpler, straightforward service with which I filed legitimately free, and have never looked back.

Plus, I've read about Intuit's history with the whole market, and I will never willingly give them a damn cent.

throwawayboise 4 years ago | | |

It's not like an honest mistake is the end of the world. I've made tax mistakes. You get a letter from the IRS, with the amount you owe or are due back, and you settle up. There are no draconian penalties or full audits unless they suspect intentional fraud.

vuln 4 years ago | | |

Hiring a CPA was one of the best decisions I have made in my entire adult life.

pkulak 4 years ago | | |

I could probably do my taxes with a 1040-EZ most years, but I still pay a local CPA $300 to do it for me. I'm just happier without $300 but with taxes done.

tppiotrowski 4 years ago | |

taxact.com did the same trick. Raised prices for a few consecutive years for no apparent reason.

They have your previous filings so switching to another provider can be a pain since you need to know last year income when submitting your filing. I always make sure to at least download the PDF's.

As a consumer we're always free to vote with our wallet and I've been happy with freetaxusa so far but I'm also waiting for the "rate hike" to come...

AdmiralAsshat 4 years ago |

Not just TurboTax, H&R Block does this shit as well.

"File your taxes free! Oh, you have to file an HSA contribution? Sorry, you'll have to buy H&R Block DELUXE ($79.99) to do that!"

Kinda feels like blackmail, really. If I don't file my HSA contribution I'm technically committing fraud, right?

zaphod12 4 years ago | |

Not sure why you're including the word 'technically,' in there - you are clearly and definitely committing tax fraud if you knowingly fail to include all of your financial information.

bombcar 4 years ago | | |

You could do it the hard way by doing the taxes in the app, printing it out, and then modifying the forms as necessary.

But the companies know exactly how much to charge you so you avoid the hassle; though I won't shell out for state e-filing when I can print and mail.

mywittyname 4 years ago | |

> If I don't file my HSA contribution I'm technically committing fraud, right?

The IRS will send you a corrected tax return, you sign it and mail them a check and you'll hear nothing from them again. Maybe you didn't get the form, or didn't understand the software, etc, etc. There are lots of honest ways to screw up your taxes. The IRS isn't going to assume fraud unless you refuse to pay them when they point it out.

I've screwed up my taxes a lot of times. Not maliciously, but not having all of my forms, I've had clients report paying me a different amount than they told the IRS, forgot stock trades I made, etc. Every time, they've sent a letter asking to pay a balance, plus maybe a small fee, and all is good.

pkulak 4 years ago | | |

I wonder if this is a backdoor into having the IRS mail you your completed form to sign and send back, like many other countries do. Just file a 1040-EZ every year with only your personal details and everything else zeroed out, and then look over what comes back in 6 months. :D

kn0where 4 years ago |

Good, but the situation is so much worse than just this. Most Americans could just use the IRS Free File system, which the article mentions, instead of ever giving money to Intuit or H&R Block ever again. But we don’t heavily advertise that system, because that would encourage people to use it, and if you’re going that far, you might as well let the IRS build its own tax software with all your information prefilled like they do in civilized countries.

As long as the job of Congress is to kiss the ass of every powerful industry lobby, we won’t have good things.

aclindsa 4 years ago |

I recently started an open-source tax solver, partly because I'm not a huge fan of Intuit: https://github.com/habutax/habutax

It isn't perfect since its a young project, but I've attempted to simplify and modularize the process of creating/maintaining forms to allow for that part to be crowd-sourced as much as possible (and I'd love your help!).

bschwindHN 4 years ago | |

Seems like you should combine forces with ustaxes.org?

https://news.ycombinator.com/item?id=30848936

csb6 4 years ago | | |

Here is another similar project that has been around a while for anyone interested

http://opentaxsolver.sourceforge.net

ChrisArchitect 4 years ago |

[dupe]

More discussion over here: https://news.ycombinator.com/item?id=30846884

tareqak 4 years ago |

FTC's own press release: https://www.ftc.gov/news-events/news/press-releases/2022/03/...

decebalus1 4 years ago |

I hate TurboTax with a passion. At this point, the only benefit I see from it is the fact that because my taxes are boring, I just update the information from the last return. Which is something the IRS could do EASILY. Because of all the 'tax freedom' which has been lobbied in America, I now have to pay a private corporation, navigate countless dark patterns to make sure I don't accidentally sign up for Super AuDiTProTec™ at every step of the way (God forbid I sell stock or do something soo complicated), to do something the federal government is more than competent to do on their own.

Every piece of news in which Intuit gets slapped is good news to me. I just hope legislators start doing their jobs at some point and spare the taxpayer of this bullshit.

systematical 4 years ago |

I stopped using TurboTax after it told me I owed $20,000 to the District of Columbia. I went to an accountant and DC ended up owing me money. Clearly I entered something wrong in TurboTax, but the experience was enough for me to decide paying someone is worth the money and frankly saves me much time as it only takes me minutes to send my information by email and another few minutes to review the results and digitally sign.

Most of my income is from W2 and some 1099 here and there. As others mentioned, America is backwards and the politicians and 1% keep fleecing it towards Romes fate.

I love seeing those on the top get fleeced for a change, unfortunately this will just be a slap on the wrist.

41b696ef1113 4 years ago |

Everyone should listen to this Planet Money episode [0] going into some of the politics surrounding making taxes easier.

[0] https://www.npr.org/sections/money/2019/04/03/709656642/epis...

gjsman-1000 4 years ago |

> "In some TurboTax ads, "almost every word spoken is the word 'free.'"

Really? There are some TurboTax ads where every word spoken is the word 'free.' ;)

throwawaygh 4 years ago | |

Almost. I thought that was hyperbole too, but... holy shit, they aren't kidding:

1. https://www.tvcommercialad.com/watch/XosLKPV

2. https://www.youtube.com/watch?v=1qDZA7j4rXU

3. https://www.youtube.com/watch?v=jZV7l3AD5Nc

MBCook 4 years ago | |

Wait, it’s NOT free free free free?

syastrov 4 years ago |

I wrote an article [1] a few years ago to vent about how messed up and backward the experience has been for especially foreign filers. The “free” options provided by commercial companies are as TFA states unusable by large portions of the population. Besides those, the IRS provides “free fillable forms online”, which looks like a scam website and also has many limitations (one of which, in my case, was that you must provide a US phone number). It’s all beautifully messed up.

So there wouldn’t be this problem with Intuit if the government got their shit together. Why not spend efforts to improve the system rather than litigation? The answer? Lobbying.

This is all in stark contrast to the system which exists in Denmark, where I live, where taxes are all filed online and the government automatically fetches most information so that you mostly only need to review it and add deductions.

[1] https://medium.com/@syastrov/us-tax-system-a-fractal-of-bad-...

Melatonic 4 years ago |

Credit Karma had a free tax filing application as of last year but as they were purchased by Intuit who knows what is happening with that....

tengkahwee 4 years ago | |

It's now Cash App Tax here https://cash.app/taxes as part of the acquisition agreement.

pianoben 4 years ago |

Fucking finally!

Someday our descendants will have sane and automatic filing like the rest of the developed world; I can only hope to live long enough to see the death of this stupid industry.

oneoff786 4 years ago |

A well deserved twist of the knife to do this right before the tax rush.

munk-a 4 years ago | |

And it couldn't have happened to a nicer company. These guys have been begging for some false advertising prosecution for a while.

flerchin 4 years ago |

Freetaxusa is so great.

rhexs 4 years ago | |

Love the product as well. Great pricing, handles my complicated return fine. I do miss Turbotax auto importing everything, but doing it manually helps me understand what I'm doing better.

CogitoCogito 4 years ago | |

Do you know if Freetaxusa supports declaring international income/taxes?

Edit: I looks like they don't :(

Items Not Supported

    Foreign employment income (Form 2555)

https://www.freetaxusa.com/supported_forms.jsp

ed_elliott_asc 4 years ago |

Is there a way to do your taxes without paying any money?

a1371 4 years ago |

Intuit is one of the few companies that I don't hear any good things about them. They always do something shady, last one I recall was sharing employee salary info with Equifax.

That's why despite my bookkeepers protests, we moved to another accounting service and when they bought MailChimp I pulled my whole company out of that too.

I understand workplace is not always a place for activism, but I could switch with reasonable effort and it made me feel good not to fund this sort of behavior.

MobileVet 4 years ago |

Not at all affiliated but Free Tax USA appears to be a great alternative. They have been around for quite a while, but I have only used them this year as it was the first I heard of them.

Biggest downside is no import from brokerage, so if you trade a lot it could be annoying to create your schedule D.

https://www.freetaxusa.com/

JRKrause 4 years ago |

I manually filed a revision to a previous tax year in which I had accidentally double-payed state taxes on a schedule K-2 disbursement two years back. Without any background in this I was able to follow the IRS and state-gov websites to get everything together and ultimately received my check for the difference (many thousands of dollars). All without paying a dollar.

kaitai 4 years ago | |

I manually filed taxes on paper (federal) last year and they still have not been processed. Got a letter that the IRS is sitting on my 5-figure tax payment but haven't gone through the 1040 yet.

There is an institutional (mainly Republican) commitment to strangling the IRS here in the US. Filing taxes should be free and easy.

cranekam 4 years ago | | |

> Filing taxes should be free and easy.

Or, ideally, not needed at all. In the UK having an average financial situation like a job (one that doesn’t pay megabucks, anyway), a pension, a tax-efficient savings account and a student doesn’t require any filing at all. Everything happens through payroll. If you do earn a lot or have other things that trigger the need to file it’s free and not overly onerous — certainly within the grasp of a mere mortal.

(And before someone chimes in with “how do you know the government gets the figures right?!”: because the tax code, or at least the parts that face most people, is straightforward and most people have a bog-standard default configuration that is easy to verify.)

rootusrootus 4 years ago | | |

And of course they won't be paying interest on a delayed refund, but they definitely want interest if you are slow in paying them.

bick_nyers 4 years ago |

A dark pattern I just learned about with TurboTax, is that if you attempt to downgrade from paid to free when it is time to file (even without utilizing paid features), they force you to completely start over from scratch. For a lot of people, they may not even know they are in "paid mode" until it comes time to punch in the debit card.

assuringllama 4 years ago |

In my country, we rarely use software or professional services for filing personal income tax. Not for most people unless you have special circumstances which are usually reserved for super high networth individuals.

What my local IRS did is sensible default. Employment income are submitted electronically to my IRS from most employers. Deductions and reliefs are automatically factored in if it relates to other government services (e.g. reliefs for child).

What I love most is for information that they don't have information on, such as deductible expenses for rental income, they suggest a default of 15% expenses where we don't have to provide any proof or documentation. It is a 15% deduction over the rental income that's just given to you. Of course, we can challenge it if we feel we should have higher deductions, providing them with the necessary documents.

physicsguy 4 years ago |

From an outsider perspective, the US tax system is nuts.

Here in the UK, the tax year runs from April to April. Your employer reports exactly your taxable earnings to the government every month. You can log in online and see exactly what you're taxed on. You do not need to fill out a self-assessment at all - it's all done automatically, except for under certain circumstances which don't affect most of the population, but roughly:

* You have earnings over £1000 a year from outside of your normal employment (e.g. from interest on savings, selling things on eBay, whatever). * You are earning above £50,000 per year but want to continue claiming child benefit (which phases out between £50,000 and £60,000, so some needs to be repaid). * You earn over £100,000.

linuxhansl 4 years ago |

Finally!

First Intuit lobbies to prevent free tax returns by claiming that can provide their own (very sketchy) free service for that. Then they have the gall to opt out that very program which they used to prevent free tax returns in the first place.

I wish they would just go away.

Arubis 4 years ago |

Many users of this site aren’t especially price-sensitive; if you’re one of them and in the habit of using tax filing software, I urge you to consider hiring an accountant for your taxes. You’ll pay a couple hundred bucks, which may be offset by the CPA finding deductions or credits that your software didn’t highlight, and that money goes to someone you’ve picked out and hired rather than a corp that’ll use your money to lobby against your best interests. And you’ll save a bunch of time, which may be enough to make this worthwhile in and of itself for you!

quadrifoliate 4 years ago | |

What are some concrete examples of these deductions that people keep talking about? I'd actually like to know, so I can perhaps convince myself to get a CPA next year. The only deductions I have seen as a salaried person with some minor stock trades are things for home heating credits and such which I am always ineligible for on the basis of income.

daniel-cussen 4 years ago | |

Just mail your taxes in with a letter and a stamp, come on!

isolli 4 years ago |

In Europe (in most countries as far as I can tell), electronic filing is administered by the government, and it's easy to use (often prefilled for simple situations). As mentioned in the article, in the US, electronic filing is offered for free only to taxpayers below a certain income threshold, and the service is offered by private companies. They often pay themselves back with tax advances at usury rates. I can't help but think that it is another example of how the US tax system is beholden to private interests.

korginator 4 years ago |

This is band-aid for a fracture. Suing Intuit does not address the underlying problem.

It's not hard to collect income data automatically. Here in Singapore (as in many other countries) I get a message reminding me to check my tax data before the filing date. I just login and click "Submit". If I forget to do this, I may miss some deductions, but it goes through anyway.

Tax filing can be made simple enough that a layperson can do it without employing an accountant.

gpm 4 years ago |

Docket for the case: https://www.courtlistener.com/docket/63193711/federal-trade-...

Dang - it might be nice to include this in the "Related" comment pinned to the top, it's just the "level up in the filesystem" above the courtlistener link you already have in it.

alephnan 4 years ago |

I'm curious how independent the FTC is from political pressure and lobbyists?

In the way there is a revolving door with the SEC, is there a revolving door at the FTC?

usednet 4 years ago | |

Yes. The FTC, BigLaw, and tech are highly interconnected.

> Public Citizen found that just over 75 percent of top FTC officials (31 out of 41) over the past two decades have either left the agency to serve corporate interests confronting FTC issues, joined the agency after serving corporate interests on these issues, or both.

https://www.citizen.org/article/ftc-big-tech-revolving-door-...

alephnan 4 years ago | | |

Right, so when an agency like the FTC flexes their muscle, I’m a little bit cynical.

Are they reminding BigTech that hey, they have political power and some palms needs to be greased.

smcleod 4 years ago |

Hasan Minhaj on TurboTax: https://youtu.be/7xQQkzWhMOc?t=1290 & https://web.archive.org/web/20210130180334/https://www.turbo...

beej71 4 years ago |

Here's what's worked for me in terms of not paying Intuit any money (as a W-2 and 1099 earner):

If there's something you can't figure out, is risky, or a one-off, hire someone to do your taxes.

Then use that as a template for subsequent years to do it yourself.

Also, use the federal free fillable forms to e-file. They might be available for your state, as well.

daniel-cussen 4 years ago | |

Just do it by mail.

beej71 4 years ago | | |

It costs the taxpayers less money to file electronically. And it's less error-prone.

But as long as Intuit isn't making any money, I'm fine with whatever.

chrisfrantz 4 years ago |

If you want to see an example, I took a screenshot[1] a week ago of the massive Intuit ad in Google Ads that blocks the results you may otherwise see.

1 https://twitter.com/frantzfries/status/1505942638704345094?s...

josephd79 4 years ago |

Government: You must provide a free way for those that qualify.

Intuit: OK.

Intuits exec to its employees: Make this free system, but hide it from the public. Provide links that are broken, make sure it doesn't show up on search indexes.

Scott Cook and all those involved should have all of their assets seized. About as slimy as you can get as a person. Made billions off of scamming United States citizens.

anonresearcher 4 years ago | |

I'm curious what the original deal was, because Intuit doesn't even have the free system anymore. This year, they "elected not to renew its participation in the IRS Free File Program." [1]

[1] https://freefile.intuit.com/

josephd79 4 years ago | | |

Allegedly the government had plans to make a completely free, simple way for you file your taxes electronically. Tax software companies knew if that took place their cash machines would die. They made an agreement with the government that they would provide a completely free simple way for individuals to file taxes electronically if the government wouldn't build their own. They technically did, they just made it pretty much impossible to find it. Broken links, hid it from search indexes etc.

jawshoeadan 4 years ago |

https://turbotaxsucksass.org/

jawshoeadan 4 years ago | |

Oh shit didn’t even realize this “ ntuit has elected not to renew its participation in the IRS Free File Program and will no longer be offering IRS Free File Program delivered by TurboTax” Go to hell intuit. https://freefile.intuit.com/

mwexler 4 years ago |

ProPublica has been hammering on this since 2019. Their series of investigations at https://www.propublica.org/series/the-turbotax-trap is very eyeopening, and teeth-gritting.

msie 4 years ago |

And I just read this story about gun-tracing: https://www.gq.com/story/inside-federal-bureau-of-way-too-ma...

Lobbyists have way too much power.

briandear 4 years ago |

Let’s not blame Intuit for this. Blame the politicians.

Here’s Milton Friedman on the reason the tax code is intentionally complicated: https://m.youtube.com/watch?v=TruCIPy79w8

ZephyrOhm 4 years ago |

So glad to see TurboTax held accountable for this deception. I have to help 24 of my friends get to the actual free version while filing their own taxes... The solution, use an adblocker, and click in an non-obvious area

soorya3 4 years ago |

This is insane and I get PTSD during tax time. You know simple task of adding a state refund into turbotax took 2 hours.

I wrote to both of the representatives in my state, let's see what I hear back.

encryptluks2 4 years ago | |

If it is anything like my experience they will just add you to their bulk email list, and possibly send you a letter saying thanks for your comments. Unless you pay to play, your ideas will not influence them significantly.

webXL 4 years ago |

This is about as close as you can get to the government suing itself.

Turbotax is the dominant player in an industry created by the government. Tax prep fees are just another tax.

macinjosh 4 years ago |

Pro tip: when I was doing my taxes TurboTax asked me for a survey. I complained bitterly about their lobbying. I was suddenly able to file fed and state free.

ChrisArchitect 4 years ago |

https://news.ycombinator.com/item?id=30840861

nimish 4 years ago |

eFile could be free too but it's an enormous pain in the ass to even get registered as an IRS developer.

IRS provides docs: https://www.irs.gov/e-file-providers/tax-year-2021-modernize...

but hides them from the public.

anm89 4 years ago |

I wouldn't say I usually get excited about something a federal regulator does but I'll make an exception for this one.

guenthert 4 years ago |

Yeah, it's 'free' unless you are unemployed. I believe those tax fellows just think differently.

mike503 4 years ago |

Amusing. They lobby to keep the government and IRS complex, get sued back, but ultimately it’ll always be a net gain.

tormock 4 years ago |

Doesn't H&R block do that too?

And they try to trick you at every step to "upgrade" to the paid version...

ModernMech 4 years ago | |

Intuit was begging to be sued though. Literally the only word in the ads is "free", and they say it like 100 times to emphasize just how free it is. And of course it's not free at all. It can't get any easier than this.

mikeInAlaska 4 years ago |

My last CPA had a dart board on his wall.

The outside was NOT DEDUCTIBLE.

The inner, smaller ring was DEDUCTIBLE.

The bullseye was DEDUCTIBLE UNTIL AUDIT.

jprd 4 years ago |

I think we can all agree that discovery is going to be fun and lead us places we can only dream of.

musicale 4 years ago |

Amazing it took them this long.

So when will Intuit be returning all of the bait-and-switch money?

bigjoedeez 4 years ago |

What's the problem? I file for free each year.

jxi 4 years ago |

Any way to donate to the cause?

jeffrallen 4 years ago |

About. Damn. Time.

neycoda 4 years ago |

Yay!

dang 4 years ago |

The saga continues:

Ask HN: How does TurboTax get away with dark patterns? - https://news.ycombinator.com/item?id=30409523 - Feb 2022 (122 comments)

Filing Taxes Could Be Free and Simple. But H&R Block and Intuit Lobby Against It (2017) - https://news.ycombinator.com/item?id=30185484 - Feb 2022 (18 comments)

Killing TurboTax - https://news.ycombinator.com/item?id=26330584 - March 2021 (662 comments)

Show HN: ustaxes.org – open-source tax filing webapp - https://news.ycombinator.com/item?id=26138446 - Feb 2021 (219 comments)

TurboTax Tricked You into Paying to File Your Taxes (2019) - https://news.ycombinator.com/item?id=26102695 - Feb 2021 (306 comments)

TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free (2019) - https://news.ycombinator.com/item?id=26060414 - Feb 2021 (199 comments)

FTC Is Investigating Intuit over TurboTax Practices - https://news.ycombinator.com/item?id=24409093 - Sept 2020 (194 comments)

IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax - https://news.ycombinator.com/item?id=21923220 - Dec 2019 (448 comments)

IRS Tried to Hide Emails That Show Tax Industry Influence over Free File Program - https://news.ycombinator.com/item?id=21393758 - Oct 2019 (188 comments)

TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free - https://news.ycombinator.com/item?id=21281411 - Oct 2019 (447 comments)

TurboTax to charge more lower-income customers - https://news.ycombinator.com/item?id=20461169 - July 2019 (81 comments)

Congress Scraps Provision to Restrict IRS from Competing with TurboTax - https://news.ycombinator.com/item?id=20119916 - June 2019 (18 comments)

TurboTax Uses a “Military Discount” to Trick Troops into Paying to File Taxes - https://news.ycombinator.com/item?id=19994118 - May 2019 (42 comments)

Listen to TurboTax Lie to Get Out of Refunding Overcharged Customers - https://news.ycombinator.com/item?id=19870242 - May 2019 (44 comments)

TurboTax and H&R Block Saw Free Tax Filing as a Threat - https://news.ycombinator.com/item?id=19810981 - May 2019 (143 comments)

TurboTax Hides Its Free File Page from Search Engines - https://news.ycombinator.com/item?id=19758126 - April 2019 (262 comments)

TurboTax Uses Dark Patterns to Trick You into Paying to File Your Taxes - https://news.ycombinator.com/item?id=19718284 - April 2019 (274 comments)

Congress Is About to Ban the US Government from Offering Free Online Tax Filing - https://news.ycombinator.com/item?id=19613725 - April 2019 (696 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=19392673 - March 2019 (253 comments)

H&R Block and Intuit Lobby Against Free and Simple Tax Filing (2017) - https://news.ycombinator.com/item?id=18956883 - Jan 2019 (190 comments)

Would You Let the I.R.S. Prepare Your Taxes? (2015) - https://news.ycombinator.com/item?id=17751383 - Aug 2018 (424 comments)

Why I'm boycotting TurboTax this year - https://news.ycombinator.com/item?id=16844458 - April 2018 (23 comments)

H&R Block and Intuit Lobbying Against Simpler Tax Filing (2017) - https://news.ycombinator.com/item?id=16841449 - April 2018 (232 comments)

H&R Block and Intuit Are Lobbying Against Making Tax Filling Free and Easy - https://news.ycombinator.com/item?id=13922482 - March 2017 (234 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=13853150 - March 2017 (439 comments)

TurboTax Takes Aim at Smaller Rival in Fight for Filers - https://news.ycombinator.com/item?id=11150694 - Feb 2016 (87 comments)

Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9381437 - April 2015 (150 comments)

Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9380232 - April 2015 (124 comments)

Filing taxes: It shouldn't be so hard - https://news.ycombinator.com/item?id=5488084 - April 2013 (56 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing - https://news.ycombinator.com/item?id=5443203 - March 2013 (330 comments)

notch656a 4 years ago |

The fact that our government doesn't have the collective intelligence to just mail the tax bill using the information it already knows, with the option for the recipient to submit corrections/deductions, is a testament to the utter failure of governance in the US. Fortunately having an ineffective government can often be a feature instead of a bug.

daniel-cussen 4 years ago |

Turbotax is a tax on paying tax.

I like paying taxes to the State because that money goes to military and entitlements, and keeping the lights on. I do not agree with every military action, or every entitlement, but it's not my place to decide what direction the country goes in, it is my place to push.

I wonder how many orphanages Intuit runs, how much welfare they pay, where the bases they operate are, how many men they've put on the moon, to have the gall to demand taxes. That is an literally an act of sedition, literally a racket.

Bud 4 years ago |

Deceptive is right. I filed using TurboTax today. Federal return plus two state returns. Their "free" service ended up costing me around $180 even though I suspect my return is much simpler than most.

daniel-cussen 4 years ago |

The Turbotax tax.