FTC judge rules Intuit broke law, must stop advertising TurboTax as “free”

https://arstechnica.com/tech-policy/2023/09/ftc-judge-rules-intuit-broke-law-must-stop-advertising-turbotax-as-free/

by thunderbong • 3 years ago

360 88 3 years ago

arstechnica.com

RetiredRichard• 3 years ago

Another victory for Lina Khan!

hackernewds• 3 years ago

Said no one ever!

kyrra• 3 years ago

As a reminder, this is an administrative judge that is part of the executive branch, not part of the judiciary. There is a supreme court case that will be heard in the upcoming term around the extent that administrative judges can be used, though that one is for the SEC.

https://www.scotusblog.com/case-files/cases/securities-and-e...

The issue people have with the status quo is that the SEC, FTC, etc get to play judge and prosecutor, so there are some definite conflicts of interest going on.

lancewiggs• 3 years ago

Meanwhile the advertising is clearly deceptive and the company will do whatever it can, including an extensive PR campaign that many will be exposed to, to delay the obvious result.

yieldcrv• 3 years ago

and I also hope ALJ’s get struck down as unconstitutional

Veerrrry little of what they do is agreeable mega corp curbing things, its just rubber stamping agency opinions and masquerading it as due process

crazygringo• 3 years ago

the SEC, FTC, etc get to play judge and prosecutor, so there are some definite conflicts of interest going on.

No, there's no conflict on interest here. They're a regulatory agency and their job is to regulate. Regulatory agencies don't treat everything like a court case and aren't supposed to. Kind of like how patent agencies will grant or reject patent applications but that's not them playing "judge and prosecutor", it's just them doing their job.

Conflicts of interest generally involve financial interest or similar, e.g. a judge making a ruling on a company while owning stock in that company.

There is no analagous conflict of interest here. This is just a regulatory agency doing its job.

sophacles2• 3 years ago

The issue people have with the status quo is that the SEC, FTC, etc get to play judge and prosecutor, so there are some definite conflicts of interest going on.

People need to go back to junior high civics class then - prosecutor is and always as been a role of the excutive branch.

ChrisArchitect2• 3 years ago

[dupe]

ChrisArchitect2• 3 years ago

Lots of earlier discussion over here:

https://news.ycombinator.com/item?id=37437311

ryukoposting4• 3 years ago

The entire "tax filing software" industry shouldn't exist. The IRS should be required to maintain its own online filing system, and provide it to all Americans without charge. That costs money? They're literally the revenue service, I'm sure we can find some money for them.

That's really the crux of this entire issue. Companies like Intuit have lobbied an industry into existence, and boy oh boy it's lucrative. Pointless "administrative courts" be damned, I like watching Intuit squirm.

idontwantthis4• 3 years ago

Thanks to Biden they are getting $60 billion to modernize. And Republicans have done everything they can to take it back from them.

ekianjo3• 3 years ago

60 billion? They need to send a rocket to mars or something?

knubie• 3 years ago

$60 billion is a lot of money. How much do Americans actually spend on tax prep per year?

thunky• 3 years ago

The tax system will continue to get more and more complex.

It's great news for Intuit.

TheGRS• 3 years ago

I don’t think logical reasoning is the problem in this situation, it’s a lobby issue.

andrewia• 3 years ago

It looks like the IRS is moving to test their own preparing/filing software for the 2023 tax year. Hopefully in 4-5 years, TurboTax and HR Block will only be needed for people with complicated tax situations, while the remaining 90% of the population can use the IRS's application. https://www.pbs.org/newshour/politics/irs-moves-forward-with...

mgiampapa2• 3 years ago

No one with a complicated tax situation should ever consider H&R Block, it's almost monkey and a dartboard level of skilled tax prep. TurboTax at least you can drive and as a semi-educated tax payer do it right. Everyone is looking forward to the IRS providing a baseline service except the tax industry.

ekianjo3• 3 years ago

The IRS should be required to maintain its own online filing system, and provide it to all Americans without charge.

Sure but if you let the government do it you can be 100 % sure it will be the worst software ever designed.

They have no incentive to make it good. You know the drill.

Vanit• 3 years ago

The one the govt made in Australia isn't half bad, though mygov was rough when it launched.

nly• 3 years ago

The UK manage this and we're completely dysfunctional in many ways.

Doing your taxes via self assessment is free and takes about 30mins to an hour online via HMRC.

Most people also go their entire lives without "doing their taxes"

sealeck• 3 years ago

Have you tried using TurboTax? It doesn't exactly make one sing with joy.

hackerfooze• 3 years ago

Right - maybe we could have Bitcoin miners make the software?

ClumsyPilot• 3 years ago

They have no incentive to make it good. You know the drill

And yet I regularly come across companies that manage to do even worse, despite having insentives. What should happen to them, Execution?

mgiampapa2• 3 years ago

Have you ever purchased health care via healthcare.gov? It's not bad at all in my experience. It certainly gets the job done with a minimum amount of pain.

Broken_Hippo• 3 years ago

Government services don't have to be horrible.

Taxes in Norway are a breeze, for example. You can design services so that they are easy to use for the taxpayer.

If you want a more local example, take a look at the Indiana DMV (Department of Motor Vehicles). The upgrades took it from "Ugh" to "maybe I can do it online or take a quick trip into a branch". It might have degraded in the last 10 years (i moved away) but I didn't mind dealing with them. Getting an apostille (special stamp for international stuff) on a document wasn't bad either - you just needed to be patient and wait on mail.

Taxes can be like this.

And I'll mention that the government - and you - have incentive for this. Taxes that are easy to pay and easy to fill out for the average person means that there is greater compliance. Greater compliance means more revenue, and we can spend the time and money on other things (like auditing complicated taxes instead of people using a 1040EZ)

rcxdude2• 3 years ago

Tax payment is something which governments actually have a lot of incentive to get right, because it is how they get income. In countries which don't have a powerful political faction which doesn't believe the government should provide services to its citizens and sabotages attempts to do so, paying taxes is generally extremely smooth, requiring no actual effort at all from most citizens, not even filling in an online form.

ryukoposting4• 3 years ago

It seems like things are improving. Treasury Direct recently went from "worst login system I have ever used" to "ugly but effective." OPM's SF86 form is by far the most complicated government form I have ever seen (lots of good reasons for that) but the web UI is modern, intuitive, and aesthetically pleasing. The federal student aid site always worked great.

I expect the quality of government websites to improve exponentially as the old guard takes their "series of tubes" mentality out the door with them.

jalapenos2• 3 years ago

Amen.

Australia is a good example. All online via their government website. Basically a glorified multi-page form, but it's autofilled with any data they've already received (e.g. salary paid and tax withheld by employers), and there's lots of guidance.

On the otherhand, in Japan they're just in the early days of doing e-tax (borderline unusable and still easier to paper file). But for those who even have to file (most people don't), you can fill in a one page paper form and drop it in the mail.

Whenever I see these articles about "turbotax" and whatever, I roll my eyes, same as whenever a discussion about "tips" starts up.

It's completely OK to take the best ideas from other countries and make them your own. It doesn't take anything from your own culture, and in fact frees up resources to do more of your own culture.

kahnclusions• 3 years ago

The UK is also a pretty good example. For the vast majority of people paid through PAYE, their tax reporting, withholdings and refunds are completely automatic.

You only start having to file a tax return when you earn above £100k, and even then you can do it online for free at the government’s website.

Intuit as a business should not exist. Congress needs to make tax filing free and as automated as possible. I’ll be happy to see Sasan run out of business.

ApolloFortyNine• 3 years ago

you can fill in a one page paper form and drop it in the mail.

The US has the 1040ez which is the same idea, it's all that's needed for the majority of filers.

smitty1e2• 3 years ago

Jonah Golberg notes: "Complexity is a subsidy." The U.S. tax code is a canonical example.

It is astounding to compose this reply on a smart phone in a country with such a Byzantine train wreck of a tax system.

The situation would border on acceptable if the tax system actually did a coherent job of funding the government.

However, the arterial bleeding that is the government's deficit spending habit can only be said to have a notional relationship to the tax code.

Rather, the tax code seems to exist as a means to sculpt societal behavior.

Those who read HN and have some insights into stabile systems need to be thought leaders in reforming this mess.

/rant

ryukoposting4• 3 years ago

Intuit has lobbied against policies that would simplify the tax code. They have enormous financial incentive to make people believe that taxes are hard and must be hard. Just look at the new "don't do your taxes" schtick they've been pushing since this lawsuit got off the ground.

datavirtue3• 3 years ago

Yeah, I realized a long time ago that all federal income taxes do is cancel out a portion of the money supply to keep inflation in check.

bdzr• 3 years ago

Companies like Intuit have lobbied an industry into existence

Did they lobby an industry into existence, or did they beat the government at providing value to their own esoteric system by 15 or more years, and then lobby to keep their standing? I don't doubt the company is awful, but they're as popular as they are for more reasons than lobbying. At the time, they made one of the worst annual experiences fairly pain free.

I never understood the idea that the government ought to write their own e-filing software when others already exist, and quite affordably so; I usually get free tax filing from some TurboTax competitor (last year it was CashApp).

rcxdude2• 3 years ago

Well, there's also a faction in the government who will protest against taxes by making paying them as painful as possible. It's not just lobbying by the companies which benefit from filling the gap deliberately produced by this.

chris_wot• 3 years ago

The government paid them to provide this service.

csallen• 3 years ago

I never understood the idea that the government ought to write their own e-filing software when others already exist

This is the most baffling take I've read on this subject.

The IRS are the ones we're submitting our tax forms to in the first place. Why on earth shouldn't they have their own e-filing service for the information they're requesting from us?

Plus they already have a ton of data on everyone's income and taxes paid throughout the year, so they can largely pre-fill these forms for us, saving us time and preventing mistakes. Why on earth wouldn't we want that?

matkoniecz• 3 years ago

Did they lobby an industry into existence

Yes, they managed to outlaw providing such service by government.

For reference, Poland and many other countries have such system without such parasites like TurboTax (people with complex situations still have accountants or special software)

hereme8882• 3 years ago

And you would trust the IRS software to provide all the savings possible? Their job is literally to collect as much money as possible from people to cover for the that new $520MM Biden pledged to give Ukraine for green energy, lol.

LapsangGuzzler• 3 years ago

What OP is proposing is how most of the modern world handles tax collection.

Their job is literally to collect as much money as possible from people

The tax code clearly dictates how much is owed by each individual. Now a private company like TurboTax is literally out to get as much money as possible because that's how private companies work.

plagiarist3• 3 years ago

Their job is literally to collect money owed to the government based on income. If one is making all their income from wages it is not complicated to figure out. I'm sure people will test it and write about the accuracy. And nothing is stopping you from using a private tax prep option.

Regarding your knee-jerk partisanship: I don't think it's going to directly to Biden and Ukraine yet, the country is still paying off Donald's 2020 trillions of dollars in gifts to corporations that already had three years with enough tax cut money to do massive stock buybacks.

ryukoposting4• 3 years ago

I pity the fool who trusts Intuit to offer a quality product in a market with a captive and serially misinformed audience. Then again, it seems like you'd fall into the latter category. I don't care how you file your taxes, but take off the tinfoil hat, people are staring.

sophacles2• 3 years ago

Even if I didn't trust the bureaucrats to follow their nature and apply the rules, I still want this. It's not like I couldn't still get a CPA or additional tax software to find problems.

The IRS literally already has 90%+ of the information I need to gather and manually enter already - there's no reason for them not to provide a prefilled tax form as a starting point. Its just the Intuit (et al) are just a bunch of rent-seeking leeches that lobby to keep their obsolete business model relevant by law.

GuB-42• 3 years ago

The argument against it, and the one companies like Intuit are using is that the government has incentives to make people pay more, for example by making it easy to miss deductibles.

Private companies incentives is to save their customer money by not paying more taxes than they should, because that's where the value of their product lie.

I don't live in the US, so I don't know how things are done there. I live in France and we have a rather good government website, doing my taxes takes me less than an hour, but my situation is simple as I am an employee with very little deductibles. Most self employed people I know hire an accountant.

wizerdrobe• 3 years ago

I’m all for using a private accountant to handle taxes, but boy does TurboTax shit the bed on anything more complicated than a 1099.

Sold a house and had a disbursement from an LLC this past year and TurboTax was under the impression we owed capital gains and a massive penalty. We opted in to their tax expert add on, a nice woman with twelve (12) years of expert experience! She also claimed we owed capital gains and her source for this statement was a blogspam link to a Myrtle Beach real estate agent detail how taxes work for OUT-of-staters. Not a factor for a lifelong resident and in any case I was shocked and appalled that this so-called expert cited me a f*cking WordPress blog for taxation resulting in a steep 5-figure sum being due.

Our new, beloved, local accountant has our taxes done in an afternoon and we saw a nice refund this year (God bless the child tax credits.)

So while Intuit may have a theoretical incentive they sure seem to be a lot more of a Comcast duty of care.

plagiarist3• 3 years ago

Intuit's incentive is doing as many returns as possible, they could give a shit if people pay more or less than filing independently.

I doubt the government would fail to include a deductible once declared. So it is on individuals to declare them. Same as it is with filling out information so a private tax service can do calculations.

jussij• 3 years ago

Companies like Intuit have lobbied an industry into existence, and boy oh boy it's lucrative.

Nearly every public facing industry lobbies Congress to protect their industries at the expense of the USA citizen.

One of the worst offenders is the US drug industry.

In Australia, our government can buy the exact same US drugs at a 79% to 306% (the average is 149%) discount to what American citizens have to pay. This only happens because or government barters with these pharmaceutical companies and gets a massive volume discount.

Thanks to Congress, these exact same volume discounts are not allowed and in fact there are laws in place that forbid the US government asking for any form of volume discount. This means USA citizens pay way over the full price for their prescription drugs, thanks to restrictive laws designed to hurt the US citizen and protect these companies.

Biden finally managed to force Congress's hand and soon the US government will be allowed to barter for a better price, but he only managed to get a change that happens in 2026. For the next two years American citizen will still be getting ripped off by these drug companies.

What is worse, most of the America population doesn't even realize Biden managed to bring about these changes, and no doubt should the GOP win in 2024 there's a chance those law changes might be reversed.

I have a good idea which candidates these drug companies will be supporting in 2024.

christophilus• 3 years ago

I don’t think it’s so cut and dry. Anecdotally, the Republican base is pretty skeptical of drug companies after COVID.

It’s been a weird change to watch. For most of my life it’s been my left wing and / or hippie friends who were super skeptical of the drug industry. Today, it’s a tossup between them and my right wing friends as to who is more anti big-pharma.

imrehg• 3 years ago

Taiwan does e-tax, and it's pretty decent. Can use some internet banking / investment system credentials to log in, as well as your national health insurance card, as well as digital citizen certificate. Download all your central data of taxes witheld or paid on your behalf, fill in a few details, and off to the races.

Except last time I've checked, even the English version needed a Windows system with Chinese characters to run properly (not even any of the Traditional Chinese, say Unicode, but some specific one). Also, there are printed paper bits to file sometimes in the end.

Nonetheless it's still good to have something "blessed", and it's also evolving.

amelius• 3 years ago

Don't worry, soon an army of LLM-based tax lawyers will eat their lunch.

datavirtue3• 3 years ago

I was in the business for 30 years and I very much agree. Tax prep is a lucrative service because people refuse to read the manual. It is not hard if you can read and follow directions. If you are lucky enough to be more than a wage slave you need a strategy that is being executed all year...that strategy is based on tax code and you will likely have an advisor plotting this all out anyway until you get it down pat.

stusmall• 3 years ago

That costs money? They're literally the revenue service, I'm sure we can find some money for them.

I completely agree but I think its worth pointing out the recent controversy over better funding the IRS. Better funding the system to catch tax cheats makes it more fair, helps the middle/lower classes and is revenue positive and somehow that caused outrage. Some folks just don't have any interest in a functional system. It's always been the case but sadly these days they seem to have moved from the fringe to the mainstream.

m463• 3 years ago

There's also a few more points.

1) When Ron Paul ran for office, they thought he was out of his mind when he said the IRS could be abolished. Until you realize that personal income taxes didn't exist before 1913, and started out at 1% revenue.

2) Many people are worried that when citizens are taken out-of-the-loop when filing their income taxes, that the amount of tax will increase dramatically without scrutiny.

cyanydeez• 3 years ago

The politics of hating the tax system is too valuable.

Simulacra• 3 years ago

Into it, reinforces the notion that you should be thankful for your government because it's the best that money can buy.

feldrim• 3 years ago

It's unreasonable that a public institution to outsource a primary responsibility.

Even though nobody cares about the law in Turkey, on paper the public service outsourcing principle is limited, and it's a good regulation. For instance, a local government is responsible for maintenance of roads. If there's a topic which requires high level of expertise and out of context of daily operations, then it is allowed to outsource.

In parallel, tax filing and return processes are primary responsibilities of government. They should not be able to outsource this. Or they cannot defend that it's not their job description.

I'm living in Estonia, which allows me fill in tax returns and such under 10 minutes as a resident. It's an amazing experience. It's so easy and fractionless, it's something you don't care and forget. You know something "just works" when you don't worry about it.

javajosh• 3 years ago

It's reasonable, but unethical, for taxation opponents to keep the process as painful as possible until they get what they want, which is the elimination of income tax.

hereme8882• 3 years ago

After all these years...a slap in the wrist.

pahool• 3 years ago

Cool. Now can we get wireless carriers to stop advertising their bandwidth-capped plans as "unlimited"?

nimish• 3 years ago

It is incredibly irritating that the IRS apis are not publically available. Feels illegal to be honest.

You have to set up a company with multiple more hoops to even get docs.

plagiarist3• 3 years ago

Curious, what APIs would be helpful?

PopAlongKid2• 3 years ago

Tax returns in U.S. are submitted electronically as XML documents. Software specs used to be publicly available, but yes I believe now you have to be a registered software provider with the IRS to get access. I suspect it was done to fight fraud.

hedora• 3 years ago

While I agree that TurboTax shouldn’t exist, I’d much rather they be forced to retroactively honor their lowest advertised price (since that’s required by law, and much more than the damages the court decided one).

egypturnash• 3 years ago

good, fuck Turbotax.

FTC judge rules Intuit broke law, must stop advertising TurboTax as “free”

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