How the Makers of TurboTax Are Trying to Keep Doing Your Taxes Annoying

The company has long lobbied against a simplified, free tax-filing process that could take as little as 15 minutes.

An advertising sign for TurboTax software is seen on display in a Best Buy store March 23, 2006 in Niles, Illinois.
National Journal
Emma Roller
See more stories about...
Emma Roller
April 15, 2014, 10:47 a.m.

Ima­gine a world where, in­stead of hav­ing to manu­ally fill out the same boxes on your tax forms every year, the IRS filled out your pa­per­work for you in ad­vance and told you how much they think you owe, us­ing in­form­a­tion the IRS already gets from banks and em­ploy­ers. If you agreed with their es­tim­ate, you could just sign the pa­per­work and re­turn it. If you dis­agreed with their es­tim­ate, you could file your taxes the way you have been do­ing.

Sounds like a pretty good deal, right?

Not for the makers of Tur­bo­Tax, the on­line tax-pre­par­a­tion soft­ware that mil­lions of Amer­ic­ans use to file their taxes every year. In­tu­it, the com­pany that owns Tur­bo­Tax, has lob­bied hard to pre­vent auto­mat­ic tax fil­ing from be­com­ing a real­ity.

On Monday, ProP­ub­lica fol­lowed up on its re­port from last year about In­tu­it’s at­tempts to sty­mie re­turn-free tax-fil­ing le­gis­la­tion. ProP­ub­lica found that, in the past five years, In­tu­it has spent $11.5 mil­lion lob­by­ing against re­turn-free fil­ing at the fed­er­al level.

The com­pany has fought re­turn-free fil­ing at the state level as well. Back in 2009, Cali­for­nia was work­ing to im­ple­ment ReadyRe­turn, a state pro­gram that helps low-in­come tax­pay­ers file their taxes for free. In­tu­it fe­ro­ciously lob­bied against the pro­gram, and donated $1 mil­lion to a group fight­ing the elec­tion of state Comp­troller John Chi­ang, who helped put the pro­gram in place.

In­tu­it says the IRS would ex­ploit a re­turn-free fil­ing sys­tem to va­cu­um up as much rev­en­ue from tax­pay­ers as pos­sible.

“Re­turn Free min­im­izes the tax­pay­ers’ voice and in­stead max­im­izes rev­en­ue col­lec­tion for gov­ern­ment,” Ju­lie Miller, an In­tu­it rep­res­ent­at­ive, told Na­tion­al Journ­al. “That kind of an­ti­con­sumer policy does not ad­vance tax­pay­er rights, cit­izen em­power­ment, or real sim­pli­fic­a­tion of the tax code.”

But it isn’t just the IRS that has a ves­ted in­terest in con­trolling how Amer­ic­ans pay their taxes. More than 24 mil­lion people used Tur­bo­Tax to file their taxes in 2012, and the pro­gram ac­coun­ted for 35 per­cent of In­tu­it’s $4.2 bil­lion in rev­en­ue that year.

As Jordan Weiss­man at Slate notes, there is a more reas­on­able ar­gu­ment for not ad­opt­ing a re­turn-free fil­ing sys­tem: The sys­tem would be less con­veni­ent for Amer­ic­ans with com­plex taxes, or for small busi­nesses who need to give payroll in­form­a­tion to the IRS to help out their em­ploy­ees. But as many as 44 per­cent of tax­pay­ers would have an easi­er time fil­ing their taxes, ac­cord­ing to the Treas­ury De­part­ment.

Re­pub­lic­ans would prob­ably agree with In­tu­it that the IRS is not the best ar­bit­er of how much money people owe the gov­ern­ment. They have little trust for the IRS since the agency was ac­cused of tar­get­ing tea-party groups for audits. A sys­tem like re­turn-free fil­ing, which hands more power to the IRS, would cause a polit­ic­al ruck­us. And as long as fil­ing your taxes re­mains a frus­trat­ing, overly com­plex pro­cess, an­ti­tax con­ser­vat­ives like Grover Nor­quist will con­tin­ue to have a polit­ic­al punch­ing bag.

What We're Following See More »
STAFF PICKS
What the Current Crop of Candidates Could Learn from JFK
1 days ago
WHY WE CARE

Much has been made of David Brooks’s recent New York Times column, in which confesses to missing already the civility and humanity of Barack Obama, compared to who might take his place. In NewYorker.com, Jeffrey Frank reminds us how critical such attributes are to foreign policy. “It’s hard to imagine Kennedy so casually referring to the leader of Russia as a gangster or a thug. For that matter, it’s hard to imagine any president comparing the Russian leader to Hitler [as] Hillary Clinton did at a private fund-raiser. … Kennedy, who always worried that miscalculation could lead to war, paid close attention to the language of diplomacy.”

Source:
STAFF PICKS
Maher Weighs in on Bernie, Trump and Palin
1 days ago
WHY WE CARE

“We haven’t seen a true leftist since FDR, so many millions are coming out of the woodwork to vote for Bernie Sanders; he is the Occupy movement now come to life in the political arena.” So says Bill Maher in his Hollywood Reporter cover story (more a stream-of-consciousness riff than an essay, actually). Conservative states may never vote for a socialist in the general election, but “this stuff has never been on the table, and these voters have never been activated.” Maher saves most of his bile for Donald Trump and Sarah Palin, writing that by nominating Palin as vice president “John McCain is the one who opened the Book of the Dead and let the monsters out.” And Trump is picking up where Palin left off.

Source:
×