Getting Better, Finally: Intuit's Shady Actions For Free File Program Lead To Change In IRS Deal

from the free-as-in-taxes dept

Going through the history of our posts on Intuit and TurboTax will give you an incredibly frustrating recent history of Intuit's bullshit actions regarding its free tax filing program for low-income households. This all stems from a deal the IRS cut with several major tax preparation companies, which amounted essentially to the IRS promising not to offer its own free file program so long as these companies, Intuit being the largest, provided free tax filing programs to the public themselves. The outcome of this naive deal cut by the IRS was to have companies like Intuit do everything possible to hide its free file sites from the public internet by delisting it from searches, then lying to customers to avoid refunding money when they complained that they could have filed for free, and finally Intuit similarly fooling veterans into paying for services that would otherwise be free all while wrapping itself in the American flag.

ProPublica did a bevy of fantastic reporting on all of this, leading to a fair amount of public outrage at how blatantly cynical Intuit behaved. It would be easy to be equally cynical in thinking that the IRS would simply sit and watch all this without taking any action. Perhaps to the surprise of many, however, it appears that the shining of the light on Intuit's actions has led the IRS to significantly change the deal it struck with tax prep companies in a way that should be very, very positive for the public.

The IRS announced significant changes Monday to its deal with the tax prep software industry. Now companies are barred from hiding their free products from search engines such as Google, and a years-old prohibition on the IRS creating its own online filing system has been scrapped. The addendum also expressly bars the companies from “engaging in any practice” that would exclude their Free File offerings “from an organic internet search.” ProPublica reported in April that Intuit and H&R Block had added code to their Free File pages that hid them from Google and other search engines, diverting many users to the companies’ paid products.

“The improved process will make Free File stronger and give taxpayers another reason to consider this valuable software option,” IRS Commissioner Chuck Rettig said in a statement. The agency hopes the changes will make the free option more accessible for taxpayers in the 2020 filing season, he said.

It may seem a bit much to expect the IRS to flip the script and offer its own fleshed out free to file program to compete with private companies in the span of a year or so. Still, reading the quote above, it sure sounds like that's the IRS' plan. It's something that absolutely should happen, as for most lower and middle income taxpayers, the IRS already has everything it needs to prepare simple tax returns. There is zero reason why anyone not filing a complicated return should pay any amount of dollars to Intuit instead of just verifying the information that the IRS needs to process a return.

It should be noted that the prohibition on the IRS offering its own free file program was the result of intense lobbying by the likes of Intuit. That makes it all the more funny to see how the company is pretending to react publicly to these changes.

In a blog post on the Intuit website, the company said, “Intuit strongly supports these changes to the Free File program and associated Free File offerings because they increase the focus on the taxpayer experience.”

That would be hilarious if it weren't so infuriating. Intuit and its peers had every damned opportunity to make the taxpayer experience the focus of its own efforts. Instead, these companies took every measure to hide its free file programs and websites and to trick the taxpayer into paying for a service that was supposed to be free.

That is, if nothing else, certainly some kind of customer experience.

Filed Under: free file, irs, taxes
Companies: intuit


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  1. icon
    Norahc (profile), 6 Jan 2020 @ 5:29pm

    It may seem a bit much to expect the IRS to flip the script and offer its own fleshed out free to file program to compete with private companies in the span of a year or so.

    Doubt it will ever happen. The government takes in more tax money by having these third parties involved. First, they tax the individuals, then they get to tax the income the tax preparers and companies make from their customers.

    reply to this | link to this | view in thread ]

  2. identicon
    Lawrence D’Oliveiro, 6 Jan 2020 @ 6:01pm

    Re: get to tax the income

    Big corporations paying income tax? HAHAHAHAHAHAHAHA!!!!

    reply to this | link to this | view in thread ]

  3. This comment has been flagged by the community. Click here to show it
    icon
    OldMugwump (profile), 6 Jan 2020 @ 6:01pm

    Trump sucks! [eom]

    reply to this | link to this | view in thread ]

  4. icon
    Anonymous Anonymous Coward (profile), 6 Jan 2020 @ 6:02pm

    Re:

    Actually the already had one, I remember using some time ago. Of course they might have trashed the code and have to rebuild it, but it is far more likely that one of those original programmers still has a copy.

    reply to this | link to this | view in thread ]

  5. identicon
    Anonymous Coward, 6 Jan 2020 @ 8:37pm

    All is not done yet. It remains to be seen if the tax preparer corps can still game the system. I suspect this close to filing time the excuse for this one year is, "We didn't have time to prepare this year. We'll have it ready next year."

    That would buy them a year to find a new loop hole. Only when their backs are against the wall with no where to go and they come out with a free, non-hidden, non-gamed form, will I believe it.

    reply to this | link to this | view in thread ]

  6. identicon
    Supernova, 6 Jan 2020 @ 10:33pm

    Perhaps too early to celebrate

    I got an email yesterday from TurboTax telling me that my employer already filed my forms, so I went to their site to file my taxes. The link to their free version (NOT TurboTax Free Edition, but the actual free version) is currently broken. And the IRS link to Free File hasn't been updated since December 21st of 2019, claiming that it's "closed for the season" and to "check back in January". https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free This doesn't necessarily mean anything shady... yet.

    reply to this | link to this | view in thread ]

  7. identicon
    Bobvious, 6 Jan 2020 @ 10:55pm

    O say can you see, Intuit’s File For Free?

    What they proudly obscured, and then hid from search engines
    Also H+R Blocked, and would not let you see
    TurboTax doubled down, while fleecing the veterans
    And they simply don’t care, FREE’s not found anywhere
    Yet another injustice the flag has to bear
    They’ll make damned sure there’s no way that you can save
    Until the IRS forces them to behave

    reply to this | link to this | view in thread ]

  8. icon
    Jeroen Hellingman (profile), 6 Jan 2020 @ 11:47pm

    Here in the Netherlands we have been using the free tax filing software provided by the Dutch equivalent of the IRS for over 25 years, and it has never taken me more than an hour to complete my income tax filings. The last 10 years or so, the forms are prefilled with all details, and all it takes is click through to verify them, add some freelance income they don't know about yet and press submit. Last year took it me at most 15 minutes.

    We have about 40.000 "accidental Americans" in the country, and government officials here don't seem to understand why it is such a hardship to file taxes or get a US TIN so they can keep their (Dutch) bank accounts due to FACTA. Just getting rid of that "US Person" status would cost at least USD 8000: 5000 to fill IRS returns over five years, and some 3000 to officially renounce US citizenship. That people are willing to pay such amounts shows how much of a toxic asset US citizenship has become.

    reply to this | link to this | view in thread ]

  9. identicon
    Bobvious, 7 Jan 2020 @ 2:21am

    O say can you see, Intuit’s File For Free?

    What they proudly obscured, and then hid from search engines
    Also H+R Blocked, and would not let you see
    TurboTax doubled down, while fleecing the veterans

    And they simply don’t care, FREE’s not found anywhere
    Yet another injustice the flag has to bear
    They’ll make damned sure there’s no way that you can save
    Until the IRS forces them to behave

    reply to this | link to this | view in thread ]

  10. identicon
    El Protestor, 7 Jan 2020 @ 5:22am

    "Free" file

    Intuit got my state to eliminate a state tax free file site that worked great for years. I was able to import my previous info from the prior year and get my state taxes done in less than 15 minutes and get a printed confirmation.

    I used to use TurboTax Deluxe. Since their heinous behaviour, I have been protesting by filing paper forms. I download, fill, and print the PDFs from the governments and mail them in. This is the best way to put pressure on our governments to get free file working.

    reply to this | link to this | view in thread ]

  11. icon
    Wendy Cockcroft (profile), 7 Jan 2020 @ 5:39am

    Re: O say can you see, Intuit’s File For Free?

    Can somebody PLEASE make this First Word?

    Great job, Bobvious!

    reply to this | link to this | view in thread ]

  12. identicon
    Anonymous Coward, 7 Jan 2020 @ 5:55am

    Re:

    Is there any reason FOIA couldn't be used to get the IRS's (presumably public-domain) source code? It might not have a user-friendly interface, but being able to exactly match the calculations would be a good start.

    reply to this | link to this | view in thread ]

  13. identicon
    Anonymous Coward, 7 Jan 2020 @ 6:56am

    Why not just fill out your own forms? It is not that hard to do, just need a few beers, a few days and lots of patience because it is a complete screw up.

    I used to only have a few forms to fill out which totaled two or three pages, now each of those prior forms has morphed into several pages some of which are mostly blank. IIRC, tax prep folk charge per page - right? Even the simple returns cost over a hundred bucks, how are those who struggle going to cough up that kind of cash? Maybe we will need IRS insurance just in case the tax prep screws up.

    I read that the IRS is going after the children of deceased parents who were supposedly over paid decades ago. I guess that is why I am seeing a lot of tax/debt relief ads on the tv because as we all know the rich do not pay taxes.

    reply to this | link to this | view in thread ]

  14. identicon
    Anonymous Coward, 7 Jan 2020 @ 9:04am

    Re:

    It's not hard to do when you have no deductions.

    reply to this | link to this | view in thread ]

  15. identicon
    Anonymous Coward, 7 Jan 2020 @ 11:11am

    Re: Re:

    Poor people have deductions? They might have in the past, but the new trump taxation scheme removes a lot of them. Poor people may have credits but they are not difficult to fill out.

    Many middle class have lost their deductions.

    I like how it is being smart when a well to do takes their legal deductions & credits while it is taking advantage when a less fortunate takes their legal deductions & credits.

    reply to this | link to this | view in thread ]

  16. identicon
    Bobvious, 7 Jan 2020 @ 1:30pm

    I like how it is being smart

    when a well to do takes their legal deductions & credits while it is taking advantage when a less fortunate takes their legal deductions & credits.

    Those Titanic deckchairs won't rearrange themselves.
    https://getyarn.io/yarn-clip/9ca33155-a997-4975-a613-f10b183f399d

    reply to this | link to this | view in thread ]

  17. identicon
    Bobvious, 7 Jan 2020 @ 1:54pm

    Re: Re: O say can you see, Intuit’s File For Free?

    Oh Shucks.

    Thank you Wendy and the First Word promoter.

    Perhaps with this version of the music for something different ♫ https://www.youtube.com/watch?v=M_PtnvVQhqA

    reply to this | link to this | view in thread ]

  18. icon
    CrushU (profile), 10 Jan 2020 @ 8:31am

    Tax Preparation is an Industry

    And it really shouldn't be.
    I used to work for a Tax Prep software company (not Intuit) and there are so many people who make money just filing others' taxes that I believe it's a very low chance that we'll ever manage to get a good Free File system provided by the IRS. And we should have one.

    The most common person who has a tax return that they should actually take to a tax preparer is a farmer. Beyond that, a business owner with at least 10 employees is the next most common Individual filer who should find a tax preparer. Everyone whose only income shows up on a single W2 should be filing their own taxes, with a few rare exceptions. (Divorcees can get complicated.)

    reply to this | link to this | view in thread ]


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