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Even as TurboTax’s business thrived, 2019 has been a rocky year for Intuit’s long-running war against government encroachment. In April, the company was close to finally succeeding in its long-held goal to make Free File permanent. A bill called the Taxpayer First Act was sailing toward almost unanimous approval in Congress. But after ProPublica published a series of stories about the program, including a story showing that military families and students were particularly affected by Intuit’s business tactics, the bill stalled.
In early October, the council sent a version of its final report, which included a harsh appraisal of the Free File program, to the IRS to seek responses before releasing it publicly the following month. “There’s a lot of desperation — people will agree, will click, will https://turbo-tax.org/ do anything to file,” said a former longtime software developer. But for the companies, there was a clear benefit to winning customers directly, rather than through the IRS program. The companies had complete control over how they handled customers from start to finish.
While it is rarely discussed these days, Loren served 18 days in jail for a tax evasion conviction intuit turbotax commercial actress back in 1982. This year, it costs companies $5.6 million for a 30-second commercial slot.
The centerpiece of Intuit’s anti-encroachment strategy has been the Free File program, hatched 17 years ago in a moment of crisis for the company. Under the terms of an agreement with the federal government, Intuit and other commercial tax prep companies promised to provide free online filing to tens of millions of lower-income taxpayers.
Rep. Zoe Lofgren, the California Democrat whose district includes part of Silicon Valley, has introduced or co-sponsored five bills over the years that would codify the Free File program, with names like the Free File Permanence Act. Lofgren’s spokesperson told ProPublica that the congresswoman believes the IRS, because of its role as tax collector, should not also be the tax preparer. But TaxAct’s Free File gambit had forever transformed the QuickBooks industry. Advertising “free” was a great lure, so TaxAct took the battle to a different venue. Barred from making a free offer to everyone through Free File on the IRS’ website, TaxAct decided to make the offer on its own website in 2006. Intuit recognized a credible challenge from the upstart and countered the next year, launching TurboTax Free Edition on its website. The first year of Free File was 2003, and for Intuit, things went well.
Actor Wesley Snipes was convicted in 2008 on three counts of failing to file a tax return. After losing his appeal, he was sentenced to three years in prison. Snipes’ defense asserted that a rising tide of Americans feel they are constitutionally protected from paying taxes. Intuit also addresses Canadian tax returns with an entirely separate product also named TurboTax, but previously What is bookkeeping called QuickTax. The French version has retained its original name ImpôtRapide until 2017, when it was renamed TurboImpôt. Simply select the “Live Help” button to connect with an expert for on-demand advice and answers, right on your screen. Intuit promotes its TurboTax Live service, which lets users connect and get support in real time from a CPA, in a new commercial.
First, it was buying ads to direct people who searched for the truly free version to products where they would eventually have to pay. Second, it suppressed the landing page of the truly free product so that it would never appear. TurboTax controls more than half of the “do-it-yourself” tax-prep market.
After we revealed that Intuit had hidden its Free File product from search engines, the company changed its code. This was done after April 15, so it was too late for many people who could have filed for free. We’d like to hear about your experience in the tax prep software industry with companies like Intuit, H&R Block or Jackson Hewitt. I am an actress who worked for the same company, but have two W2s.
The IRS’ customer service staff, already too thin to respond adequately to Americans’ questions about the tax code, would have to grow substantially to handle millions of software queries. Congress “will never give you sufficient funding,” Rossotti told ProPublica. Intuit’s lobbyists also went above the OMB and pressed their case directly to the White House, Forman recalled. The IRS is seemingly the biggest threat to Intuit and other commercial tax prep businesses, but it has more frequently acted as the industry’s ally, defending the Free File program even in the face of critical internal reviews. Since Free File’s launch, Intuit has done everything it could to limit the program’s reach while making sure the government stuck to its end of the deal. As ProPublica has reported, Intuit added code to the Free File landing page of TurboTax that hid it from search engines like Google, making it harder for would-be users to find.
In exchange, the IRS would promise not to develop its own system. If the government succeeded in creating a system that allowed the vast majority of taxpayers to file online for free, TurboTax profits would plummet. Intuit recognized that the notion of “return-free filing” was not going away on its own. Intuit has dominated the tax software market since 1993, when for $225 million, it bought Chipsoft, the San Diego-based company that had created TurboTax.
If you’re not satisfied, return it within 60 days of shipment with your dated receipt for a full refund (excluding shipping & handling). If you’re not satisfied, return it to Intuit within 60 days of purchase with your dated receipt for a full refund. Kelly Frye was born on December 6, 1984 in Houston, Texas, USA. She is an actress and producer, known for Secrets of Sulphur Springs , Criminal Minds and 12 Mighty Orphans . Laurie Okin was born on March 10, 1971 in Rockport, Massachusetts, USA. She is an actress and producer, known for Copshop , Teacher of the Year and The Office . Anne Gregory is an actress and producer, known for Punk’d , Drunk Wedding and Parks and Recreation .
The 2003 version of the TurboTax software contained digital rights management that tracked whether it had previously been installed on a computer by writing to sector 33 on the hard drive. This allowed it to track if it was on a computer previously, even through reinstalling the operating system. This also caused it to conflict with some boot loaders that store data there, rendering those computers unbootable. With Full Service simply hand off your taxes and let a tax expert do all the heavy lifting for you. Despite the scrutiny, Wall Street has continued to embrace the company’s business model. The company recently announced it made $1.5 billion in profits for its fiscal year.
When Smith took over in 2008, TurboTax was a market leader, but only a small portion of Americans filed their taxes online. By 2019, nearly 40% of U.S. taxpayers filed online and some 40 million of them did so with TurboTax, far more than with any other product. Goodarzi is differentiating between TurboTax’s Free Edition and its Free File product, which it offers as part of a deal with the IRS. As we have written, TurboTax directs people looking to file for free to the Free Edition, where many end up having to pay to file their returns.
Although the Justice Department ultimately blocked that takeover, the market has grown even more consolidated in recent years. In 2019, according to a ProPublica analysis of IRS data, the two giants accounted for 81% of all individual returns filed using tax prep software. But the next year, Intuit began to lose control of its creation. A scrappy competitor, TaxAct, decided to use Free File to stand out. The company decided it would try to pick up as many new customers as possible and then charge them for ancillary services.
Even then, TurboTax was the most popular option, but Intuit pursued a plan of aggressive growth. The product necessarily came on a disk, and by the end of the 1990s TurboTax boxes were nearly ubiquitous, on shelves in office supply stores across America. But the success of TurboTax rests on a shaky foundation, one that could collapse overnight if the U.S. government did what most wealthy countries did long ago and made tax filing simple and free for most citizens. Here Goodarzi confirmed the accuracy of our story reporting that Intuit deliberately hid its Free File product from search engines.
A confidential presentation for Intuit’s board showed how the company, over a decade, beat back attempts to make tax filing easier. The agency made its reasoning clear in a previously unreported letter sent to the Free File Alliance the following year.
There are a number of different versions, including TurboTax Deluxe, TurboTax Premier, etc. TurboTax is available for both federal and state income tax returns.
You may use TurboTax Online without charge up to the point you decide to print or electronically file your tax return. Printing or electronically filing your return reflects your satisfaction with TurboTax Online, at which time you will be required to pay or register for the product.
During tax season, we did a series of searches to try to find TurboTax’s Free File product. We repeatedly found that TurboTax had purchased ads directing users away from their Free File product and to products where many users have to pay. An Intuit spokesman said the Google search results shown in the company’s video were from April 25, which was after the April 15 tax filing deadline.
A few days later, Ryan arrived at the IRS’ Constitution Avenue headquarters in Washington to mount a defense of the program. A former Democratic Senate aide turned lawyer-lobbyist, Ryan is known on Capitol Hill for taking on politically fraught clients, including Trump attorney Michael Cohen and the government of Qatar. He helped create Free File in the early 2000s, and it was now his job to secure its future. Republicans have historically been the company’s most reliable supporters, but some Democrats joined them.
Heidi Fleiss rose to fame in the 1990s after a high-profile bust for running a prostitution ring for wealthy individuals. However, the woman known as the « Hollywood Madam » was tried not just for her salacious occupation but also for income tax evasion and money laundering. In addition to paying back taxes and fines, she was handed a 37-month prison sentence in 1996. In 2021, some individuals who used Turbotax for their tax filings were unable to access stimulus checks sent by the government because Turbotax diverted the checks to old and unused bank accounts for the customers.
Whatever external challenges to the status quo Intuit has faced, the company has been able to rely on the IRS’ continuing enthusiastic support of the Free File program. Every few years, the IRS and the industry got together to renew the deal. Alarmed, Intuit tried to get the other companies not to offer their products for free to too many potential customers, according to Dunn.
The money you earned in Ohio is also subject to California income tax, but you’ll receive a credit for the taxes you paid to Ohio. The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice.
TurboTax normally releases its new versions as soon as the IRS completes revisions to the forms and approves the TurboTax versions, usually late in the tax year. If you’re republishing online, you must link to the URL of this story on propublica.org, include all of the links from our story, including our newsletter sign up language and link, and use our PixelPing tag.
Author: Michael Cohn