TurboTax maker Intuit spent millions in record lobbying blitz

https://www.opensecrets.org/news/2024/02/turbotax-maker-intuit-spent-millions-in-record-lobbying-blitz-amid-threats-to-tax-prep-industry/

by belter • 2 years ago

98 43 2 years ago

opensecrets.org

popcalc2• 2 years ago

“As our business grows so does our engagement and education of policymakers on various issues, from AI to innovation that benefits individuals and small businesses to stronger consumer protections and tax simplification,” Intuit’s spokesperson told OpenSecrets.

Given the heavy presence of conversion-minded dark patterns in retail TurboTax, this is quite a brash statement.

dspillett• 2 years ago

stronger consumer protections

Consumers must be protected from anything that might make them consider not using TurboTax!

zahma• 2 years ago

Thinly-veiled payola as the threat of free filing looms large over their extortionate business model. I don’t doubt there are some good use cases for TurboTax, but for the vast majority of tax filers, it’s excessive. Perhaps if the tax code wasn’t Byzantine and broken there’d be less of a case to make. Of course, TurboTax and filing firms have much reason to deter tax code simplification in addition to thwarting free filing[1].

https://www.nbcnews.com/business/taxes/turbotax-h-r-block-sp...

john-radio• 2 years ago

If you took away the dark patterns from TurboTax.com, there would be nothing left but the brand name and typeface.

noodlesUK3• 2 years ago

I am of the opinion that each time the IRS adds a new form, they should by law provide a way to e-file it for free. Essentially no end-user tax software supports my personal tax situation, because the support for international situations is usually pretty terrible. Alternatively they could dramatically reduce the reporting burden for international people, perhaps with a cap on income or net worth, but I suspect pigs will fly before the US does that.

jansan• 2 years ago

In this aspect, things in Europe are actually much better. We in Germany can use a software called ELSTER, which by now has become quite usable and can be used to file all your text reports. I heard in the Netherlands the tax office sends the tax report to you and you will just have to check the numbers.

tgv• 2 years ago

That's not (entirely) true. You fill in the tax forms online on the website of the tax office, but only the known income, bank accounts, and mortgage have been filled in already. If you're an independent contractor, own a company, have stock, pension plans outside the normal pension funds, donated to charity, etc., there's still a lot to be filled in.

imgabe• 2 years ago

There is https://www.freefilefillableforms.com/ which supports most of the IRS forms as far as I know. I live outside the US and have freelance income and haven't run into a situation I couldn't use there yet.

baby3• 2 years ago

Is this official? Usually I don’t use government stuff that don’t have a .gov

noodlesUK3• 2 years ago

Unfortunately it does not cover form 5471 which is required if you own an interest in a non US company (even if the company is dormant), or form 8858 which many more internationally self employed people now need to fill out as of a few years ago, as most people self employed abroad are now seen by the IRS as a “foreign branch” of a U.S. person.

EE84M3i• 2 years ago

Does it work for Americans aboard that take Foreign Earned Income Exclusion?

Unfortunately it has no support for AMT on Form 1116 (Foreign Tax Credit).

I believe taking any FTC requires doing a full AMT calculation (instructions for schedule 2 line 1) which includes a separate AMT version of 1116, so as far as I know FFF is useless for anyone that takes FTC.

sirsinsalot2• 2 years ago

This is how the UK works. They must provide a free means to file.

HMRC must provide a free software solution that covers a large portion of income tax and national insurance.

noodlesUK3• 2 years ago

Unfortunately I couldn’t file my UK self assessment for the same reason. Only a few of the self assessment pages are supported, and anything which requires the residency or foreign pages requires commercial software. The software is dramatically cheaper than it is in the U.S. but I still take issue with it on principle.

mike503• 2 years ago

They help create the problem to sell you the solution.

pat64• 2 years ago

It’s tangential at best but there is a better way than all of this nonsense.

Your employer can declare and direct tax owed from your paycheck directly each month. Come end of year you can click like 3 links in a tax portal to ensure you’ve not overpaid and that’s the extent of your tax worries.

We obviously don’t have a perfect system here in Ireland (far from it) but Jesus Christ America, your tax system is absolutely insane to Europeans.

snvzz• 2 years ago

It's called PAYE (for Pay As You Earn), and standard in most of the world, just not the US.

dangus3• 2 years ago

Technically it is the standard in the US as well. That’s what income tax withholding is for, and most people’s mortgages or rents bundle in property taxes as well. Then the other chunk of taxes that most people pay are sales tax and gas taxes, all paid as you earn/spend.

The real distinction is the backwards filing process. You have to fill out information on W2s and 1099s that the government already has.

I think this could be streamlined without pissing off the third party tax filing industry. Just make it so that all of the information on those forms can be provided all at once to the tax filing software companies when a person puts in their personal info. TurboTax already kind of sort of does this when you put in a couple of pieces of info from each W2 and it fetches the rest, but it could be streamlined into a standard.

Then for people who file manually, there could be a system where the government sends a consolidated group of summed values for use on the manual forms. I feel like this could be an acceptable compromise that works within our broken lobbying system.

dugmartin• 2 years ago

We have required payroll deductions here in the US for federal, state and (sometimes) city taxes and if you are self-employed we have required quarterly estimated tax payments. Federal deductions include Social Security tax, Medicare tax, and income tax and employers send this money directly to the federal government. State and city deductions are usually just income tax (here is Massachusetts we also pay a tax for paid family leave).

The insane part in the US is that then every year we have to fill out a bunch of forms filling in information the government already knows. For many people this should instead be as you said "click like 3 links".

It gets really complicated when you have investment or partnership income, sell stocks or property, etc. I still do my own (complicated) taxes every year but it gets more and more complex every year and takes more and more time.

hayst4ck• 2 years ago

Johnny Harris did a fairly short piece on TurboTax that is worth watching: https://www.youtube.com/watch?v=ZhV4Z76mXrI

I watched it expecting to hear it talk about an army of lobbyists. I watched it expecting to hear about Intuit promoting more complex tax code to ensure to ensure their relevancy. I watched it expecting to hear about how easy it would be for the government to pre-fill forms.

I was not only not expecting what I heard, but I was shocked that it's even worse than I thought. I was not expecting the fraud Intuit did for their "free" offering, nor their extremely bad faith marketing campaign that followed. I didn't know that multiple previous presidencies promised simple free online filing.

Very worth a watch.

baby3• 2 years ago

^ recommend the above video and all the other videos of johnny harris. Definitely my favorite youtuber journalist.

orwin• 2 years ago

The video above is clearly one of the most informative he made recently. I do think he is a really good storyteller and choose interesting subjects, and i know it is hard to impossible to be exhaustive, but his videos are information poor compared to their length. Which is a choice i think, to have a more compelling storytelling, and it's great when the video is on a subject i know nothing about.

But each time he talk about something i already know about, i'm a bit disappointed. And it's worse when he talks about subjects he know little about.

sneed_chucker• 2 years ago

This video is good, but it seems to ignore that stuff like OLT and FreeTaxUSA exist where you can file federal taxes for free and state taxes for a small fee ($10 or $15).

It's true though that Intuit spends so much on advertising that few people understand that there are any alternatives to TurboTax or a CPA

2Gkashmiri2• 2 years ago

In India, govt has provided free incometax and indirect taxes return filing.

Its free.

Then you have companies selling 2 things.

1. Automation, bulk processing, storage, analysis for professional users to file hundreds of returns.

2. Ease of use, PDF processing, manual and electronic preparation of reruns data for end users. Paid service.

Both are complementary to govt provided filing and often require steps that need it.

India famously spent 5 billion dollars to build their indirect taxes portal.

leosanchez2• 2 years ago

India famously spent 5 billion dollars to build their indirect taxes portal.

5 Billion dollars or rupees ? And also did they outsource to Infosys / TCS ? Got any source, so that I can dig into it ?

2Gkashmiri2• 2 years ago

https://www.livemint.com/Companies/RZRas6WPQ1jevNg8C0YWdK/In...

baby3• 2 years ago

When I watched Johnny Harris video on the subject that’s when I started realizing that corporations truly rule the US.

ixaxaar• 2 years ago

Meanwhile in India - https://www.incometax.gov.in/iec/foportal/

Individual Registered Users - 118,911,572

No. of returns filed (AY 23-24) - 82,194,557

I've hired a few devs from intuit before and they tell me the Indian portal is far more usable than whatever they were building.

sirsinsalot2• 2 years ago

In the UK the tax body HMRC provide free payroll software which (by law) includes basically all the legislation. It even does pay slips.

When they introduced the Making Tax Digital scheme, the law mandated the gov must provide a free means of electronic submission.

While HMRC get a lot wrong, this they got right.

tristramb• 2 years ago

Why don't Americans use the word "greed" when referring to such behaviour?

Eddy_Viscosity2• 2 years ago

Because since the 80's 'greed is good'. And even those people who believe that look at Inuit and think 'wow, these guys are truly shit'.

glimshe• 2 years ago

This year I'm trying https://www.freetaxusa.com/. Literally free if you don't have to pay state income tax, and $15 per state otherwise, even if you have a small business.

It would be great if the government provided their own website/software for tax calculation, but even then I wouldn't mind paying $15 for polished, professionally designed software (vs $100+ for TurboTax in the case of small business+state)

_dark_matter_• 2 years ago

+1, also trying this. I signed up for their basic chat support and it was decent, but clearly the people I was talking to were not experts. They said a "manager" (hopefully more of an expert) would get back to me via email.

Overall I'm very happy though. It's not fancy, but there are no dark patterns and the $15 filing is for real. I can even file previous year updates for free (since they're all federal tax changes). And I'm not supporting Intuit!

say_it_as_it_is• 2 years ago

Why do people allow bribery to be concealed by the term, lobbying?

popcalc2• 2 years ago

The good-faith defense for lobbying is that it is transparent and would still occur even if illegal, albeit with more capacity for subverting democratic institutions. A slightly more cynical take is that it is a compromise made by a divided political playing field. The thinking is that a lack of accountability is convertible to power. Same thing goes for the new AML directives in Europe that concern disclosing political status to a financial institution upon account opening.

snowwrestler• 2 years ago

There’s a common misconception that when the press reports $millions in lobbying, that means the $millions went to the politicians.

Actually $0 of lobbying expenses go to politicians. The money is spent on salaries, ads, research, publications, etc. that are used to communicate to the politicians.

whatever1• 2 years ago

You know what? At least TurboTax works.

The other piece of garbage of software they force us to use, QuickBooks is literally the worst software ever written. Every single page is an ad for another service they offer. And no the core product cannot the bare minimum before throwing random errors.

SOLAR_FIELDS• 2 years ago

My hatred for QuickBooks led me to spend days importing my books into ERPNext. IMO the only decent feature it offers is banking integrations and transaction classification

beej71• 2 years ago

Already filed my free fillable forms. And this year my state (Oregon) built their own TurboTax knockoff that I also used. It's not full featured yet, but they're adding to it each year.

If Intuit wants to value-add to whatever the government makes for filing taxes, I'm fine with that. But actively keeping the government offering poor so that people want to use your product instead is just evil.

TurboTax maker Intuit spent millions in record lobbying blitz

Related Stories