TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free (2019)

https://www.propublica.org/article/inside-turbotax-20-year-fight-to-stop-americans-from-filing-their-taxes-for-free

by anigbrowl • 5 years ago

807 199 5 years ago

sebmellen5• 5 years ago

The leaked internal slides from Intuit are really disgusting [0][1].

From the article:

Internal presentations lay out company tactics for fighting “encroachment,” Intuit’s catchall term for any government initiative to make filing taxes easier — such as creating a free government filing system or pre-filling people’s returns with payroll or other data the IRS already has. “For a decade proposals have sought to create IRS tax software or a ReturnFree Tax System; All were stopped,” reads a confidential 2007 PowerPoint presentation from an Intuit board of directors meeting. The company’s 2014-15 plan included manufacturing “3rd-party grass roots” support. “Buy ads for op-eds/editorials/stories in African American and Latino media,” one internal PowerPoint slide states.

I'm always stunned and disappointed at how easy it is to game the American political system. I say that with great respect for this country and the freedoms it affords me, but those freedoms mean little if skullduggery like this goes on.

[0] https://www.documentcloud.org/documents/6483065-Intuit-board...

[1] https://www.documentcloud.org/documents/6483061-Intuit-Turbo...

macjohnmcc• 5 years ago

And it is relatively inexpensive.

sebmellen5• 5 years ago

And a good investment. For example, an 86,000% return on $43,000 in campaign donations: https://truthout.org/articles/you-too-can-buy-a-congressman/.

ultimoo2• 5 years ago

I was taken aback by this the most when I saw some lobbying dollar amounts earlier this year — I don’t recollect the specifics but most are probably rounding errors for multi-billion dollar Fortune 500 companies, let alone trillion dollar tech juggernauts.

wolfram74• 5 years ago

This[0] was an interesting read back '19 comparing total political spending with the size of the almond industry. It's a weird comparison.

[0]https://slatestarcodex.com/2019/09/18/too-much-dark-money-in...

juskrey2• 5 years ago

It's easy to buy central government.

rayiner7• 5 years ago

I'm always stunned and disappointed at how easy it is to game the American political system.

It’s easy to be a cynic, but you still need to match your beliefs up against reality. This particular belief really shouldn’t have survived the Trump era. Trump won in 2016 and almost won in 2020 despite Clinton and Biden having a huge financial edge from donors in the biggest industries (Wall Street, media, tech, etc.) See: https://mobile.twitter.com/annalecta/status/1323370439306055.... See: https://www.npr.org/2020/10/26/927453369/outspent-in-the-hom...

Bloomberg spent $100 million in Florida alone only to have Trump win it by a bigger margin than in 2016.

See also: https://www.cnbc.com/2016/11/09/trump-spent-about-half-of-wh... (“Trump spent about half of what Clinton did on his way to the presidency.”).

In the 2018-2020 timeframe, gun control supporters vastly outspent gun control opponents. They failed. Supporters of Prop 209 in California vastly outspent the opposition. They failed by a huge margin.

It’s actually hard to “game” the American political system. What companies like Intuit do is spend money to expose existing fault lines. Republicans are up and down the line opposed to easy tax filing because they think it’ll make it easier for government to raise taxes if people have to manually do their taxes every year. Intuit didn’t create this political fault line. It’s pre-existing. It’s based on ideology. The money is to connect Intuit’s issue (tax filing software) to this existing political fault line.

User232• 5 years ago

It’s actually hard to “game” the American political system.

Time magazine disagrees with you[1].

[1] https://time.com/5936036/secret-2020-election-campaign/

wombatmobile2• 5 years ago

What companies like Intuit do is spend money to expose existing fault lines.

...

Intuit didn’t create this political fault line. It’s pre-existing. It’s based on ideology.

I'm not sure what you're trying to say here, in moral terms.

Is your intention to defend Intuit's actions?

anigbrowl• 5 years ago

Republicans are up and down the line opposed to easy tax filing because they think it’ll make it easier for government to raise taxes if people have to manually do their taxes every year.

I think you meant to say it would make it harder to raise taxes if people had to do their returns manually. I also think you're mistaking the excuse offered by Republicans for the underlying reason. After all, if it were true then Republicans would be logically be opposed to any sort of electronic filing, whether offered from the IRS or by a third party.

refurb7• 5 years ago

Agreed. There are plenty of examples where overwhelming money failed to change the outcome. Bloomberg’s presidential run where he spent $1B and failed miserably is a great example.

As is the failure of the Keystone XL pipeline where according to HN that sweet, sweet oil money would be impossible to defeat. Well, it was defeated.

The mistake people make is “oh this problem hasn’t been fixed and someone is spending lobbying dollars so it won’t be fixed, so that must be the reason”.

I’d ask if Intuit wasn’t lobbying against cheaper ways to files taxes so we really think it would have been implemented?

triceratops• 5 years ago

This particular belief really shouldn’t have survived the Trump era

If the effect of money is really not significant, why don't politicians simply ignore the funding and do what they think their constituents want?

boulos3• 5 years ago

I think this thread is conflating election contributions/outcomes with lobbying. The main point of lobbying is not in the direct, (historically) small campaign contributions but in the large staff of lobbyists who spend time with congressional staff and leadership.

Lobbyist groups don’t care (too) much about who’s elected. They want to influence the lawmaking process.

The election examples above are not particularly relevant to lobbying. But they are relevant to money in politics, so I for one upvoted your comment. You definitely hint at the distinction between elections (and the relative lack of effectiveness) and lobbying, but I imagine people were confused by your reply (though “game the political system” is also vague).

munk-a5• 5 years ago

I would strongly disagree with

Republicans are up and down the line opposed to easy tax filing because they think it’ll make it easier for government to raise taxes if people have to manually do their taxes every year.

I think republicans tend to be against easy tax filing since it would involve wider access to the plethora of loopholes that exist in our tax system. Automatic filing would really level the playing field if small businesses and individuals got access to some[1] of the loopholes that corporations regularly exploit.

1. Ignoring, of course, accounting tricks required to set some of these up by offshoring profits/income and other advanced techniques around valuation.

mssundaram• 5 years ago

Imagine what goes on that we don't even know about

fsloth• 5 years ago

"I'm always stunned and disappointed at how easy it is to game the American political system"

Isn't that the point of a political system without hegemon? And open political system is not one that is fair to all. It is a system that is open to gaming by all.

A democracy and a "completely fair system" are completely different things. I don't think anyone has any idea how the latter would work.

sebmellen5• 5 years ago

If a political system can be controlled by using power or capital to change political outcomes, without relying on the will or consent of the people, it's hard to argue that that's democratic.

In that case, the hegemon is a faceless allocation of capital and dark interests as opposed to a strongman. This setup is probably better for individual freedoms than a dictatorship, but "results may vary" for anything else. I don't think a plutarchy is an open political system; a plutarchy is, by definition, closed to all without obscene amounts of capital, or access to it. The Wikipedia article on plutocracy is an interesting read on that [0].

There is a gray line, like Prop 22 in CA, where Uber, Lyft, et al. convinced voters to vote yes on Prop 22 by spending over $220 million on ads and campaigning [1]. Does this constitute a plutarchy? I would say no, because the voters were still the ones who chose the outcome! That's a big difference from a backdoor deal with a politician or inviting a them to a $43,000 "lunch" which will change their mind on your issue. However, it does highlight another issue — that of political advertising — but that's something for another time.

The main issue here is that the US did not adequately plan for mitigating the influence of money in politics. The NY Times ran an article highlighting the shock and horror with which the British see the American political system [2]:

Justin Fisher, a professor of political science at Brunel University London, said the American system was seen in Britain “as the worst of all worlds,” focused on “raising money and not about getting ideas across.”

Living in Switzerland, I came to the conclusion that their political setup is demonstrably better than that of the US (though also, arguably, more workable because of Switzerland's small size). In Switzerland, it would be nearly impossible for a lobbyist to pay a Swiss politician to make an important policy change and get away with it. And in most other Western European countries it would be a scandal/make big news if a politician got €50k to change their mind on something.

In the US, that happens every day.

[0] https://en.wikipedia.org/wiki/Plutocracy#United_States

[1] https://www.sfchronicle.com/business/article/Here-s-what-you...

[2] https://www.nytimes.com./2015/05/05/world/europe/britains-ca...

BLKNSLVR• 5 years ago

Advertising is an attack on human psychology. Children need to be educated to reason beyond the surface to protect themselves from the ubiquity of modern-day advertising.

TeMPOraL3• 5 years ago

Advertising is a cancer on modern society. Not only it messes the psyche of individuals, it also ties businesses in wasteful arms races. We need more than education, the industry needs to be reined in with a regulatory hammer.

shrimp_emoji• 5 years ago

On the Internet, it's a literal attack on your machine (slows the page down, incurs extra bandwidth, and can inject malware). :D

TV commercials back in tha day didn't have any of that, although nowadays they can play ultrasonic sounds that apps on your phone listen for to facilitate analytic tracking.[0]

0: https://arstechnica.com/tech-policy/2015/11/beware-of-ads-th...

tweetle_beetle• 5 years ago

That may be, but my understanding of the comment you are replying to is that it is non-advertising techniques which are distasteful.

manufacturing “3rd-party grass roots” support

...is effectively trying to achieve advertising goals outside advertising channels using deception - astroturfing, etc.

throe455• 5 years ago

In here we file taxes over internet. Tax administration takes about 10 hours every year. I am self employed dev, deal with multiple countries.

Twirrim2• 5 years ago

In the UK most people never file taxes. It's all done Pay As You Earn (PAYE), i.e. taken out of your monthly pay check. You get an annual summary of your tax payments every year, as well as it being detailed each month on your pay stub.

People that are self employed tend to need to do self-file, or those with slightly more complicated investment approaches but even then that's generally not a particular hard task.

One of the other advantages of it, is it discourages a rebate based approach to incentives. With most people not needing to file taxes each year, rebates wouldn't be particularly effective at encouraging behaviour. The government instead opts for subsidies, so the item is cheaper _at the time of purchase_. No shelling out the extra money and then eventually clawing it back, without any interest it might have accrued for you.

It was quite a shock when I moved to the US and got to experience the "delights" of filing taxes here.

refurb7• 5 years ago

How many people go through the process of making sure the gov’ts calculations are right?

And for those that don’t, how many are losing out on money because of an error?

nodesocket• 5 years ago

Ultimately this is not up companies to decided, but for lawmakers to simplify taxes and reduce loopholes and complications.

I am self employed, and it took me a few years to figure out properly how to pay and not overpay for all my taxes. The entire tax system is insane, depreciated assets, tracking car mileage, LLC fees and taxes, annual report filings, and paying quarterly taxes.

whatthesmack• 5 years ago

This is so true. I don't think most folks understand how complex it all is, otherwise there would be more pushback to legislators that "allow" (through inaction) the tax code to be so complicated. It certainly has discouraged some from running their own business, because complying with it all costs time and money, which are resources large corporations have plenty of, but small businesses have precious little of.

MattGaiser• 5 years ago

There is another interesting angle to Free File. If you are really annoyed at having to pay to file your taxes, there is a pressure relief value you will inevitably find that will make you reasonably content.

Anyone who really wants to not pay doesn't, so there is never a critical mass of passionate people.

yalogin• 5 years ago

There is really no losing for them here. They make the whole thing more complicated and make money. As part of this they "lobby" lawmakers and so the lawmakers are happy. The candidates running for office get to use "streamining tax filing" as an election promise from time to time. Its a win-win all around for them. There is no way this changes.

ehsankia• 5 years ago

You can tell there's no losing by the fact that these kind of reporting about how the whole thing is rigged has been around for years now and nothing has changed. That generally shows how locked in this whole situation is.

ibdf• 5 years ago

I’ve been paying for it for years and honestly I don’t regret it. There’s a lot that goes into their software that makes filing taxes really easy. Their site also provides so much help during the filing that I would probably spend hours researching otherwise. It’s not for everyone and yes I agree their taxes are deceiving, but does save me time each year.

dboreham• 5 years ago

I think the point is that tax filing being difficult, hence software to "make it really easy" is in some part their fault.

2Gkashmiri• 5 years ago

why cant the govt build a frigging excel sheet or a website for filing taxes because "THEY MAKE THE RULES" of what goes into a tax software. This is one of those things that is used by companies to force people into their ecosystem.

in india, the govt makes 4/6 tax returns available to be filed on the govt portal itself. It has a simple workflow based approach, asks you a few questions and in minutes you are done. Software companies exist alongside them but there is no "bad blood" between the two because they both do the same thing. the software companies products make it easier for tax professionals to keep a record and such but otherwise millions of users just dont bother with paid offerings.

that is a much better alternative than the one US has

croutonwagon• 5 years ago

I think the issue is less the truth I. Your statement (it’s undeniable really). But more that it’s by design. Intuit lobbies the govt to make the tax system over complicated, and the gov provided tax documents half asses as hell. And then along with few others (H&R Block for example) make a killing by having software that easily navigated the shit hurricane they otherwise would be a tax filing. Hell H&R Block can literally hire part time meth heads and window washers to fill out the forms, while without the software a Bonaire accountant can fuck up a filing.

stephen_g• 5 years ago

The point is that filing taxes is way easier in many other countries, and TurboTax have lobbied hard to stop any changes to the system like that in the US.

In Australia, you just log on to a portal on the tax office web site and most types of income are already in there, pre-filled. You spend a few minutes putting in any deductions or other income, and then it works out if you're eligible for any credits, offsets etc. and you click 'File'. It's free and doesn't generally take me more than about half an hour per year.

esturk• 5 years ago

I often do my taxes twice with a cheaper competitor and then use Turbo Tax to double check my results.

Let me tell you, Turbo Tax often gets a worse off final result. For example, I changed jobs in Q2 and exceeded my Social Security contribution last year. For some reason, the cheaper competitor actually caught that and got me a better result than Turbo Tax.

mydj• 5 years ago

who is the cheaper competitor?

ghoward3• 5 years ago

I don't know who the cheaper competitor that the GP refers to, but I use freetaxusa.com, and they are great.

(Disclaimer: my wife is an employee, and they are great as employers too.)

dietr1ch• 5 years ago

I did this with freetaxusa.com and turbotax on 2019 and ended up ditching turbotax for a better return with lower fees.

I now have to copy fields, but I double checked them anyways, so I think it's faser to input them myself. It's just triple clicking on a pdf and middle clicking on the browser

Rebelgecko• 5 years ago

I did the same comparison with the opposite results. Turbotax correctly handled a situation that freetax usa didn't (how much of a state income tax return was refundable from the previous year when my state refund was based on SALT taxes beyond the $10,000 maximum that the feds allow you to deduct). Technically my own fault because I incorrectly answered a question in freetaxusa that contained a double or triple negative, but Turbotax got it automatically without me having to answer any questions

vvG94KbDUtRa2• 5 years ago

That's like the most obvious thing in the world to catch and TT definitely checks for it. So this seems weird

BikiniPrince• 5 years ago

Myself and my accountant find they are off by laughable errors and stir government accepts intuit errors. It is somewhat hilarious. After a disastrous 24k error I hired a real tax professional. Money well spent.

divbzero4• 5 years ago

Any tips on how to identify a good tax professional?

starpilot• 5 years ago

Why don't you disclose the cheaper competitor's name? Are you trying to be respectful to Turbotax?

giantDinosaur• 5 years ago

Amazing. The most difficult thing I had to do with tax last year was wait until my employer pressed a button they had forgotten to press on some web form. Then it all filled out instantly.

piyushpr134• 5 years ago

It is a shame that some parts of American govt is such a slave of big businesses that they keep public good behind corporate good. For instance: gun ownership, monopoly of car dealerships for unfair & opaque practice, not upgrading railroads to help it compete with airlines, state & non-investment in public transport in non major cities, allowing large wall street cos to manipulate the markets

masonic2• 5 years ago

  gun ownership

You think big business that actively contributes to politicians favors gun ownership? The opposite is true. Michael Bloomberg's spending alone against gun ownership dwarfs the spending of the entire "gun lobby" combined.

jsweojtj• 5 years ago

I wonder if some hedge funds looking to short their next target might do a cost benefit analysis of how much a hit to Intuit's stock price might occur for $X spent in lobbying for widespread free tax return prep.

vmception• 5 years ago

lolol thats a good play, they are now

teach• 5 years ago

[2019]

mmaunder• 5 years ago

This was published October 2019.

geodel• 5 years ago

Its tax season. Expect it to show up at least 3 times a week till April. Cost of tax filing, cost of internet specially on mobile hurts more than thousands of things that are cheaper in USA.

nerdponx• 5 years ago

And it should be reposted over and over until something changes for the better.

jzer0cool• 5 years ago

I forget from what country. Years ago with a bunch of international friends one mentioned you don't really do taxes at all. If you received wages, it is the company's duty to file them and it's done.

Filing taxes does seem complicated here in the U.S. when you may have also other forms of ordinary income. So many rules, forms, etc. I wonder if people use something like TurboTax because they are just not aware how to complete this task, unless, systematically hand held in a way and just walk through getting it done before the deadline.

mtrower• 5 years ago

That's seriously a large part of it.

junon2• 5 years ago

Ex-pat American living in Germany. Unless you have some slightly less common situation, you don't have to worry about taxe filing here.

kall• 5 years ago

You really should though. I would say it‘s only a safe bet if you worked the same job for the entire year, got no bonuses and had no other income at all (even from the state).

Otherwise you either have to do it or you are missing out on credits.

It‘s pretty straightforward too. If you want you can only file your basic personal data and bank account and have the information already submitted by the employer electronically picked up. That way you can get any obvious credits for e.g. uneven earnings.

bpodgursky• 5 years ago

To be fair, paying taxes if all you're doing is receiving income from an employer isn't that bad. There's a simple form for it. Where it gets bad is the stuff your employer doesn't know about:

* Investment income

* House or other capital sales or purchases

* Stock option purchases or sales

* Child custody, dependents

etc. I don't see how any country's tax code would capture these income or loss streams without some manual filing process.

Munksgaard• 5 years ago

Most of what you mention is filed automatically for me, here in Denmark. I think the only thing normal employees regularly file manually here is kms driven to and from work, which gives a tax deduction (kørselsgodtgørelse).

divbzero4• 5 years ago

Perhaps these don’t need to be lumped into a single tax return and can instead be handled independently by the appropriate institutions — brokerages deducting tax on investments, closing agents deducting tax on house sales, IRS mailing a check each year for dependents, and so on.

Sibling comments suggest that other countries successfully automate much of their taxes.

jraby33• 5 years ago

Israel is like that. Unless you own a business. If you’re a salaried employee you never have to file.

bjoli• 5 years ago

I have a company as a side thing, so for me the process is more involved, but for most Swedes the following is what you do:

- receive a tax summary of what the Swedish tax agency believes about your earnings. - check that tax summary if it is OK (you receive a summary from all your employers in the beginning of the year. Just check if it adds up) - go online and change any numbers you believe are wrong (in my experience they are usually usually they are correct down to a granularity of a couple of hundred SEK). At that level calculating it precisely gets very hard, due to how your employer reported sick leave and such. I have always ignored anything below 1000sek (~$100) - do any deductions. Many are already pre-filled (like deductions on interest, household services and such). - sign it with your online ID

Done. Last year this process took my wife about 35 minutes. Most people are a lot less diligent.

Moru• 5 years ago

In Sweden most people get a prefilled paper form. You also get the sums from your employer and compare with the form. Then you either sign the paper and send it back or you send an SMS with the signature code on the form. The goal is to include more and more cases into this automatic taxform every year.

nikon• 5 years ago

The UK

vyrotek2• 5 years ago

How much of this mess would go away if we didn't have income tax and increased sales tax?

sdenton42• 5 years ago

My foot was hurting, so I cut it off and now just walk on my hands.

Which is to say, that's a terribly obtuse way to deal with the problem, and does nothing to keep this kind of abuse from surfacing in other domains.

vyrotek2• 5 years ago

The idea here is to shift the work to more streamlined systems already ran by businesses instead of relying on individual citizens to figure this all out. Citizens are not equipped with the time and money to deal with these abuses. Large private businesses who are already optimizing these expenses might keep things in check.

It's not a unique idea. In fact, I first heard it from IRS employees themselves.

vishnugupta• 5 years ago

Could you please describe why is that a bad idea? Or point me to a good reading source? I’m learning different aspects of economics and am genuinely interested to understand the downsides of taxing consumption as opposed to earnings. Now that I think about it, in India we are taxed on both ends.

vvG94KbDUtRa2• 5 years ago

that would incredibly regressive. it's an awful idea

MetaWhirledPeas• 5 years ago

Why?

refurb7• 5 years ago

Most sales taxes exempt essentials like basic groceries, clothing, toiletries.

It’s actually a great idea.

nexthash• 5 years ago

Gosh, Intuit has gone on a total advertising offensive recently! It seems every ad on YouTube nowadays has the same jingle: 'free free freefree freefreefree'. They are advertising their free tax filing service and advisors, which I'm sure everybody here knows is a Trojan horse disguising their lobbying to take away actual free filing provided by the government. Here's the catch: they make it really difficult to use their software for free: you have to have a very specific financial status (under $66k a year in income) and for a long time they just blatantly hid it [1]. Those ads make my blood boil whenever they come up, but the production quality/creativity is Geico-level. They must've spent a lot of money to steer people from the truth...

[1] https://www.propublica.org/article/turbotax-just-tricked-you...

eel2• 5 years ago

I don't qualify for "Free File" tax software, but I still file my taxes for free using the IRS forms. It's easy. Yes, it could be easier, and yes, Intuit's tactics are repulsive, but the fact remains that filing individual income taxes is easy and free.

I would not be surprised if articles like these are just another form of PR for tax preparation companies. The goal of these articles seem to be to convince us that taxes are complicated and difficult.

qwertay• 5 years ago

How easy is it? The system here in Australia seems super well done. They already have all my data. I just look through it and confirm its correct and add in any deductions I want to make.

ac292• 5 years ago

Its not terribly difficult if you only have say wage income and some interest on a bank account [0]. But, it can get very complex very quickly if you have other sources of income, or want to be sure to take all of the deductions you might be eligible for. On top of that, each state has their own set of taxes (though in my experience, they are simpler and largely rely on information from the federal taxes). Hence why most people use software or pay tax professionals to prepare their taxes for them.

The IRS probably could provide a more or less pre-filled form for many people. They have the information on most taxable income already. However, they dont. The reasons for this are complex, like the tax code, but mostly boil down to "politics".

[0] Here's the main tax form: https://www.irs.gov/pub/irs-pdf/f1040.pdf

AnotherGoodName• 5 years ago

I'm not from the USA but I live here now. I came from a country where you log into a government website and hit a button to confirm your return because your employer already typed it all in and sent it in earlier... The idea that you're printing out forms and filling them out is crazy. The idea that you have to type in numbers someone already has is crazy.

I don't think it's a case of people making free tax filing is difficult. It genuinely is far far harder than it has to be.

nightski• 5 years ago

It's because everyone wants their situation to be special and get special tax breaks because of it. Don't get me wrong, Turbotax is scummy but the real truth is if a politician wants to eliminate "deductions" which is what makes taxes so complicated - then you get a large backlash because someone's taxes are getting increased.

The government can't automate it because a lot of these deductions are not things they can learn about looking at your W-2.

sircastor2• 5 years ago

One side of the political spectrum has argued that the government will take advantage of this to overcharge citizens. Which sort of treats the taxing entity as an unscrupulous business looking to make a quick buck.

csharpminor2• 5 years ago

Easy for you, yes. As someone who has helped others with tax preparation, plenty of people find it daunting. Many Americans struggle with both financial literacy and literal literacy.

Tax preparation should be automatic and handled by the government, full stop.

eel2• 5 years ago

Again, I agree tax preparation should be easier. Most income is already reported to the IRS, so it stands to reason that the government could calculate my taxes for me.

I still think we're playing into the tax preparation industry by calling it daunting. I maintain the current process, while inefficient, is in fact easy for most Americans.

The IRS provides free fillable forms regardless of income level. The process for individuals is to first collect all of one's tax documents, read the instructions, and copy the numbers into the correct boxes. The forms calculate most of the math for you. If you make a mistake, the IRS will likely tell you. Not perfectly efficient, but far easier than I was led to believe.

ramraj07• 5 years ago

If anything _your_ comment sounds like propaganda from the tax prep companies: "hey! Why you hassling us! See this bloke filed his taxes by filling out the forms himself, people always have that option! All we do is offer a paid easier option! Also don't mind us lobbying the hell out of the status quo which is quite literally insane if you compare it to any other developed country! "

astura2• 5 years ago

would not be surprised if articles like these are just another form of PR for tax preparation companies

They absolutely are not - the crux of the issue is tax prep companies should be a very niche product - the government should provide an efile option. Since most people's taxes are fairly simple they should be automatically done for you so all you have to do is log in and approve of the autogenerated form. At the very, very least e-forms should be pre filled out with what the government already knows about you because your employer, bank, or brokerage reported to them.

All this standard in almost all other developed countries. It's absurd there is for profit companies calling the shots in this area.

EnderWT• 5 years ago

Previous discussion: https://news.ycombinator.com/item?id=21281411

jb775• 5 years ago

I swear I've read some version of this headline yearly for at least the past 5 years. They are clearly winning this fight.

TeMPOraL3• 5 years ago

This reminds me: I was kind of late in reading Lean Startup only two years ago, and I was surprised to see Intuit to be described there as length and in positives, pretty much a role model for innovation.

I guess the book needs an update to this example, a chapter on what it means to take innovation too far.

HotVector3• 5 years ago

At this point it's not innovation, just American politics.

tristor• 5 years ago

Intuit is truly a scummy company with the way they behave here and elsewhere. A simple example of one of these behaviors is that you cannot export data as CSV from Quickbooks Online, instead if only exports as a PDF or as an Excel XLSX file. But the XLSX is carefully crafted so it reads out zeroes (0s) in all value fields if opened with LibreOffice or any conversion tools to get a CSV.

Why do I know this? I don't have any Windows computers, I mostly work on a Mac, and Intuit doesn't make TurboTax Business for Mac, only for Windows. TaxAct has an online service for filing 1120S/K-1 for LLCs which can import data via CSV that works on any OS, so Intuit responded by no longer offering CSV exports and ensuring they're broken using F/OSS tools. Really is making it a challenge to comply with the law this year for my LLC without me having to have Windows + Office 365 licenses.

morpheuskafka• 5 years ago

Hmm that's really obnoxious, but why would Intuit benefit from forcing people to buy Excel? They don't make any money from that.

archon• 5 years ago

They benefit by preventing easy access to an export of the user’s data that could then be importied into a competitor’s software, thereby (presumably) locking in a non-trivial number of their own user base who don’t want to deal with the hassle of re-entering all of their financial data in a new product.

TeMPOraL3• 5 years ago

IIRC, they have an Excel plugin. So it's more like: stick with our SaaS; if you really prefer a desktop app, stick to Excel (and our plugin).

fladrif• 5 years ago

I'm not sure why it doesn't seem to be more well known, but CreditKarma has allowed free filing of taxes (incl. capital gains), and was recently acquired by Intuit. Last I read they were under investigation by the Department of Justice because of the implications they were eliminating a competitor.

Comments: https://news.ycombinator.com/item?id=24038559

I've used it for the past 2 years, and it has worked great for me, albeit I don't have very complicated taxes. I'm actually afraid of what happens if the acquisition goes through, definitely expecting the free tax filing to disappear soon after that occurs.

tdhoot• 5 years ago

This has already been settled; Square will take Credit Karma Tax to prevent Intuit from absorbing a competitor.

https://www.forbes.com/sites/jonathanponciano/2020/11/25/doj...

tzs• 5 years ago

I wonder how they are going to handle the Credit Karma Tax name?

According to this announcement [1] from 2020-12-03, Intuit has completed the acquisition of Credit Karma.

I logged in to Credit Karma today to do my taxes, and the tax link on the main page took me to tax.creditkarma.com where I found the familiar Credit Karma tax stuff, with a notice on the bottom of the page that says:

Tax preparation services are provided by Credit Karma Tax, Inc. a subsidiary of Square, Inc.

So, it appears that Square is indeed now handling it, but it is still tied in with Intuit's Credit Karma. I wonder if that is just some transitory thing for the 2020 tax year and for 2021 it will be on a Square domain, and the Credit Karma mail site will link to TurboTax for tax prep instead?

[1] https://investors.intuit.com/news/news-details/2020/Intuit-C...

petejames• 5 years ago

In Ireland, employees pay as they go through the year and don't have to file return. For self employed there is very simple online system provided by the Government. I despise the US tax system.

tadfisher• 5 years ago

Technically the system is pay-as-you-go in the US; employers are required to withhold estimated tax from paychecks and pay the IRS in the employee's name, or quarterly payments are made if self-employed. The broken part is that you will receive penalties if you withhold too little, or you end up loaning cash to the IRS until you file for a refund; and there are far too many variables that change the actual tax you owe for the year, so there's no way to get the number exact except in limited circumstances.

A "cheap" fix would be to eliminate deductions, and automate marginal withholding. An expensive fix would be to service deductions on a rolling basis, applying them to future income withholding.

the_arun• 5 years ago

This is an old article already discussed last year - https://news.ycombinator.com/item?id=21281411. We should mention year in the title.

hilbert423• 5 years ago

It's little wonder that democracy is in a state of decline and that faith in our public institutions is at an all time low when government can be so easily corrupted by disingenuous carpetbaggers such as Intuit. It's not as if this corruption of process by Intuit is an isolated instance, the trouble is that it's commonplace.

It seems to me that the first step in citizens reclaiming their democracy back and having our faith and integrity restored in our institutions is to take charge of the lobbying process and rescue it from corporate interests and other bad influences. I would go so far as to suggest all lobbying of politicians be done in public and that to bypass the system of public scrutiny be made a felony.

This may sound like highfalutin idealism and overkill but after what we've witnessed in Washington in recent weeks we can no longer ignore the fact that trust in our governance is at an alltime low - and that as citizens we have a collective responsibility to ensure we fix the problem.

We have to break the nexus of mistrust between the Citizenry and Government and desperate times call for desperate measures.

tehjoker2• 5 years ago

Just a tangential historical note: the carpetbaggers were the good guys. They went from the North to the defeated Confederacy to take advantage of the votes of newly freed slaves. The acquired such disdain for precisely that reason.

https://www.britannica.com/topic/carpetbagger

hilbert423• 5 years ago

Right, like so many other things these days, the term has been corrupted. Guilty as changed. ;-)

fastball• 5 years ago

I'm not sure "good guys" is correct. They went seeking to further their own fortunes (whether financial or political), which is mostly amoral – you can increase your own fortune by collaborating with others but you can also increase your fortune by taking advantage of others.

I think the carpetbagger comparison is rather apropos. In the same way as carpetbaggers, you can be a lobbyist who genuinely suggests things that are good for the American people and also are good for the corporate interests you represent. Alternatively you can lobby for things which benefit your corporate interests at the expense of the American people. Unfortunately seems like lobbying in the US is almost entirely the latter. And maybe postbellum carpetbaggers were in fact more of the former. But it's a similar scenario.

monocasa• 5 years ago

They weren't the good guys. They ate up ridiculous amounts of reconstruction money meant for southerners, and the south didn't truly recover for a century. There were other reasons too, but the carpetbaggers were among them.

They were the civil war's equivalent of Haliburton in Iraq.

doorty• 5 years ago

Same story every year around tax filing time but nothing changes.

tal8d• 5 years ago

Their letters and journals make it clear that the founders knew that lobbyists would be a threat to the integrity of the republic, but they thought that all the competing interests would largely cancel each other out. They could have used a little game theory to show that wasn't the case, as it will always be far more profitable to be the aggressor than the defender. If I want to take a penny from every tax payer in the country, I'm far more motivated than you are to guard your one penny. Even if the tax base were to unite in opposition, I have an infinite number of opportunities to try again. Power words: MPAA, SOPA, PIPA, DMCA, Tipper Gore.

HotVector3• 5 years ago

I would love to see some sources on this.

sircastor2• 5 years ago

I’m annoyed at Intuit’s purchase of Credit Karma last year. Even with the obligatory sale of its tax division to Square, Intuit eliminated a competitor.

Square will have to build up the customer base and visibility of the tax product, provided they intend to do anything with it similar to what CreditKarma was.

Intuit should simply not have been allowed to buy them.

paulpan• 5 years ago

Absolutely this.

The purchase of Credit Karma is textbook "buying out a competitor", especially since Credit Karma's tax solution was offered for "free" to customers.

Why did the government not intervene? There's hardly better evidence of political capture by the corporate America as that one.

airstrike• 5 years ago

Generally, the DOJ won't block "buying out a competitor" unless you're approaching monopoly levels of consolidation.

It's fine by the DOJ to have the number of players reduced from even 4 to just 3 and they are only really forced to act when it comes down to an attempt to reduce from 3 to 2

dataflow2• 5 years ago

If anyone here has Credit Karma: get off it. Use free monitoring services from Discover/Chase/Experian/etc.

leetcrew3• 5 years ago

if you're a chase/amex/discover customer, by all means use their free service. I particularly like the amex one that lets you do hypothetical projections. I can't recommend experian though. I just made an account with them out of curiosity, and since then I have received emails from them pretty much every day trying to upsell me on their (worthless, as far as I can tell) "premium" features. the website itself is full of dark patterns trying to make the same upsell.

FrozenVoid• 5 years ago

The root of the problem is a tax system that requires complex software to use optimally. Remove this complexity and the need for specialized, expensive software companies will disappear.

milofeynman• 5 years ago

I have had bad experience with RSUs and ESPP through TurboTax. Do any competitors handle it better? Should I just seek out a professional?

neilfrndes• 5 years ago

This is a nice NPR episode about how a professor tried fighting back against Intuit in California and almost won.

https://www.npr.org/sections/money/2017/03/22/521132960/epis...

zindlerb• 5 years ago

Someone needs to start a non-profit competitor to TurboTax that uses its fees to advocate for simplifying tax policy.

asdff• 5 years ago

Intuit will acquire or break the company before it gets legs

crowf3• 5 years ago

I don't live in America, and haven't lived there for nearly my entire life. But my parents are citizens, and they graciously gave me US citizenship. Now, while I earn money abroad, live abroad, receive support from my government abroad, I still have to file taxes in the US. For the most part I don't have to pay, but I end up paying a couple hundred dollars for someone to file my taxes. Most of the online tools don't know what to do about people not living in the US. Also, as a fortunate Hi-Tech worker, I will soon earn enough money that I will have to pay the US government taxes for money that I earned abroad.

I've looked into renouncing my US citizenship, but that costs a few thousand dollars. And, the US can reject it for several reasons, one of which is tax avoidance. Also, as per the rumors, it is nearly impossible to get a US Visa after that (and I still have American relatives who I would like to see). Seeing as us expats don't have a senator or congressman, we don't really have someone to fight for us. At least I am still allowed to vote. Before every election that I am eligible to vote in, I email the candidates and ask them what their stance is on taxing foreigners (and don't get me started on the fbar). Based on their response I vote.

divbzero4• 5 years ago

The American system of worldwide taxation based on citizenship is extremely strange and shared by just a handful of other nations such as Eritrea, Hungary, and Myanmar. [1] Even more odd was the decision to shift to territorial taxation with the Tax Cuts and Jobs Act of 2017, but only for corporations and only for income earned with tangible assets overseas. [2]

[1] https://en.wikipedia.org/wiki/International_taxation

[2] https://www.taxpolicycenter.org/briefing-book/what-territori...

crowf3• 5 years ago

Thanks for the second link. I remember hearing rumors about how the Trump administration would finally remove worldwide taxation. I guess the result was the end (or ease) of worldwide taxation for corporations only.

jraby33• 5 years ago

Very thoughtful comment.

I’m an American living abroad and got US citizenship for my children. I constantly wonder if I made a mistake.

I do get some tax savings, and most of my income and assets are in the US so I save for them there. But I know the burden of having to file taxes and possibly pay them when they’re old enough is a heavy one.

crowf3• 5 years ago

I'm sorry if my comment sounded very harsh to you. On the "bright" side, if my country ever gets destroyed, I have an insurance citizenship that "only" costs a few hundred dollars per year (and the nearly impossible restrictions when doing "weird" things like becoming a private contractor)

csomar• 5 years ago

No. A few hundreds US dollars for US citizenship is beyond worth it. If anything, this coronavirus pandemic has showed us that citizenship does matter and it's actually worth a lot.

rottingchris• 5 years ago

You might already know this but taxes you pay to the country you're resident in are (in most cases, depends on the country and the tax treaties) deducted from your taxable income.

You only need to pay Federal income tax and since most countries have higher taxation rates than the US, most expats and up with no tax liability on their income. Capital income taxes are a major pain though.

leafmeal• 5 years ago

“Dark patterns are something that are spoken of with pride and encouraged in design all hands” meetings, said one former designer.

PaulStatezny• 5 years ago

It's repulsing that this kind of thing happens. It's because of the greed and sleaziness of companies like that that we end up needing regulation.

alew1• 5 years ago

I've always been under the IRS Free File income threshold (I've worked as a high school teacher and am now in grad school), but last year after reading this article was the first time I actually filed for free. That was after 5 years of paying for deluxe TurboTax.

I had heard the government required TurboTax to have a free edition. But back in 2019 (and before), if you Googled "TurboTax free" you'd be taken to a decoy free edition; the real one was called their "freedom edition," and was hidden from Google's listings. If your tax situation is 'too complicated,' the free edition tries to upsell you to the "deluxe edition," even if the "freedom edition" could have handled the situation just fine.

Thankfully now you can find the actual free version on Google, but it's still very confusing that the "free edition" is less free than the (still somewhat hidden) IRS Free File ("freedom") version. And the faux Free Edition is still being heavily advertised.

divbzero4• 5 years ago

Good for you. I’ve made an effort to avoid TurboTax for similar reasons, just can’t stand the thought of giving money to a company that lobbies to keep our taxes complicated. Spreadsheet, PDF, and snail mail have worked fine for me so far but I would eagerly welcome a saner tax system.

For anyone else looking to stop paying Intuit, the IRS provides an intro and links to their official Free File options. [1]

[1] https://www.irs.gov/filing/free-file-do-your-federal-taxes-f...

segfaultbuserr• 5 years ago

if you Googled "TurboTax free" you'd be taken to a decoy free edition; the real one was called their "freedom edition,"

TurboTax sounds like Free Software Foundation's evil twin... "When we speak of freedom, it's a matter of price, not liberty. You should think of freedom as in free beer, not free speech!"

vidarh• 5 years ago

Patriot Act with Hasan Minhaj did a segment on this, and also set up a site to link to the real free programs of various companies. It's here:

https://www.turbotaxsucksass.com/

rwmurrayVT• 5 years ago

It would be nice if that was the top of the search results or had a near limitless budget to be at the top when searching "turbo tax".

loycombinate• 5 years ago

Credit Karma’s free file could be the end of paid tax filing. We may see an ad supported model, or synergies, like if Microsoft gives free tax software for office users. History has shown many software that was once paid become free, as entrepreneurs figure out a way to give it away and still monetize it.

atemerev• 5 years ago

I have had my taxes filled incorrectly by the government about 5 times, each time about 300-400% of the right amount (Switzerland).

Thanks but no thanks. This is like "why do you need an attorney if the government can give you one for free"?

known• 5 years ago

"Never let your inferiors do you a favor. It'll be extremely costly" --Mencken (b. 1880)

TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free (2019)

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