Hacker News Re-Imagined

FTC sues Intuit for its deceptive TurboTax “free” filing campaign

  • 1552 points
  • 3 months ago

  • @Kesseki
  • Created a post

FTC sues Intuit for its deceptive TurboTax “free” filing campaign


@ZephyrOhm 3 months

Replying to @Kesseki 🎙

So glad to see TurboTax held accountable for this deception. I have to help 24 of my friends get to the actual free version while filing their own taxes... The solution, use an adblocker, and click in an non-obvious area

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@flerchin 3 months

Replying to @Kesseki 🗣

Freetaxusa is so great.

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@msie 3 months

Replying to @Kesseki 🎙

And I just read this story about gun-tracing: https://www.gq.com/story/inside-federal-bureau-of-way-too-ma...

Lobbyists have way too much power.

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@belval 3 months

Replying to @Kesseki 🗣

I know that ship has sailed, but I really wish politicians would go back to making promises that have an impact on everyone like abolishing tax fillings.

It might be different in the US, but in Canada I file my taxes using the CRA's data directly. TurboTax even fetches it directly from their website. What's the point? They have my T4, my T2202 (studies) and everything else. Just send me a letter telling me how much money I owe/I am owed and that's it.

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@dang 3 months

Replying to @Kesseki 🎙

The saga continues:

Ask HN: How does TurboTax get away with dark patterns? - https://news.ycombinator.com/item?id=30409523 - Feb 2022 (122 comments)

Filing Taxes Could Be Free and Simple. But H&R Block and Intuit Lobby Against It (2017) - https://news.ycombinator.com/item?id=30185484 - Feb 2022 (18 comments)

Killing TurboTax - https://news.ycombinator.com/item?id=26330584 - March 2021 (662 comments)

Show HN: ustaxes.org – open-source tax filing webapp - https://news.ycombinator.com/item?id=26138446 - Feb 2021 (219 comments)

TurboTax Tricked You into Paying to File Your Taxes (2019) - https://news.ycombinator.com/item?id=26102695 - Feb 2021 (306 comments)

TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free (2019) - https://news.ycombinator.com/item?id=26060414 - Feb 2021 (199 comments)

FTC Is Investigating Intuit over TurboTax Practices - https://news.ycombinator.com/item?id=24409093 - Sept 2020 (194 comments)

IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax - https://news.ycombinator.com/item?id=21923220 - Dec 2019 (448 comments)

IRS Tried to Hide Emails That Show Tax Industry Influence over Free File Program - https://news.ycombinator.com/item?id=21393758 - Oct 2019 (188 comments)

TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free - https://news.ycombinator.com/item?id=21281411 - Oct 2019 (447 comments)

TurboTax to charge more lower-income customers - https://news.ycombinator.com/item?id=20461169 - July 2019 (81 comments)

Congress Scraps Provision to Restrict IRS from Competing with TurboTax - https://news.ycombinator.com/item?id=20119916 - June 2019 (18 comments)

TurboTax Uses a “Military Discount” to Trick Troops into Paying to File Taxes - https://news.ycombinator.com/item?id=19994118 - May 2019 (42 comments)

Listen to TurboTax Lie to Get Out of Refunding Overcharged Customers - https://news.ycombinator.com/item?id=19870242 - May 2019 (44 comments)

TurboTax and H&R Block Saw Free Tax Filing as a Threat - https://news.ycombinator.com/item?id=19810981 - May 2019 (143 comments)

TurboTax Hides Its Free File Page from Search Engines - https://news.ycombinator.com/item?id=19758126 - April 2019 (262 comments)

TurboTax Uses Dark Patterns to Trick You into Paying to File Your Taxes - https://news.ycombinator.com/item?id=19718284 - April 2019 (274 comments)

Congress Is About to Ban the US Government from Offering Free Online Tax Filing - https://news.ycombinator.com/item?id=19613725 - April 2019 (696 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=19392673 - March 2019 (253 comments)

H&R Block and Intuit Lobby Against Free and Simple Tax Filing (2017) - https://news.ycombinator.com/item?id=18956883 - Jan 2019 (190 comments)

Would You Let the I.R.S. Prepare Your Taxes? (2015) - https://news.ycombinator.com/item?id=17751383 - Aug 2018 (424 comments)

Why I'm boycotting TurboTax this year - https://news.ycombinator.com/item?id=16844458 - April 2018 (23 comments)

H&R Block and Intuit Lobbying Against Simpler Tax Filing (2017) - https://news.ycombinator.com/item?id=16841449 - April 2018 (232 comments)

H&R Block and Intuit Are Lobbying Against Making Tax Filling Free and Easy - https://news.ycombinator.com/item?id=13922482 - March 2017 (234 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=13853150 - March 2017 (439 comments)

TurboTax Takes Aim at Smaller Rival in Fight for Filers - https://news.ycombinator.com/item?id=11150694 - Feb 2016 (87 comments)

Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9381437 - April 2015 (150 comments)

Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9380232 - April 2015 (124 comments)

Filing taxes: It shouldn't be so hard - https://news.ycombinator.com/item?id=5488084 - April 2013 (56 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing - https://news.ycombinator.com/item?id=5443203 - March 2013 (330 comments)

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@isolli 3 months

Replying to @Kesseki 🎙

In Europe (in most countries as far as I can tell), electronic filing is administered by the government, and it's easy to use (often prefilled for simple situations). As mentioned in the article, in the US, electronic filing is offered for free only to taxpayers below a certain income threshold, and the service is offered by private companies. They often pay themselves back with tax advances at usury rates. I can't help but think that it is another example of how the US tax system is beholden to private interests.

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@anm89 3 months

Replying to @Kesseki 🎙

I wouldn't say I usually get excited about something a federal regulator does but I'll make an exception for this one.

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@gpm 3 months

Replying to @Kesseki 🎙

Docket for the case: https://www.courtlistener.com/docket/63193711/federal-trade-...

Dang - it might be nice to include this in the "Related" comment pinned to the top, it's just the "level up in the filesystem" above the courtlistener link you already have in it.

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@41b696ef1113 3 months

Replying to @Kesseki 🎙

Everyone should listen to this Planet Money episode [0] going into some of the politics surrounding making taxes easier.

[0] https://www.npr.org/sections/money/2019/04/03/709656642/epis...

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@Arubis 3 months

Replying to @Kesseki 🎙

Good. Fuck them and their predatory business model.

I know this is where we’re supposed to decry the system of which this is symptomatic, and talk about campaign finance and such. And all that stuff is true, sure. But Intuit has been such a consistently abusive actor that they’re normalizing regulatory capture, with enormous financial, time, stress, and legal repercussions for the entire population.

Seriously, fuck them.

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@a1371 3 months

Replying to @Kesseki 🗣

Intuit is one of the few companies that I don't hear any good things about them. They always do something shady, last one I recall was sharing employee salary info with Equifax.

That's why despite my bookkeepers protests, we moved to another accounting service and when they bought MailChimp I pulled my whole company out of that too.

I understand workplace is not always a place for activism, but I could switch with reasonable effort and it made me feel good not to fund this sort of behavior.

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@mywittyname 3 months

Replying to @Kesseki 🗣

I found out from a friend that she paid $600 to have her taxes done because (presumably) she falls for the dark patterns that TurboTax uses. She's a low paid service worker whose tax return can probably be done for free. And it is a sizable portion of her income because of things like Earned income tax credits, child tax credits, etc.

Fuck these companies.

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@guenthert 3 months

Replying to @Kesseki 🎙

Yeah, it's 'free' unless you are unemployed. I believe those tax fellows just think differently.

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@tareqak 3 months

Replying to @Kesseki 🗣



@systematical 3 months

Replying to @Kesseki 🎙

I stopped using TurboTax after it told me I owed $20,000 to the District of Columbia. I went to an accountant and DC ended up owing me money. Clearly I entered something wrong in TurboTax, but the experience was enough for me to decide paying someone is worth the money and frankly saves me much time as it only takes me minutes to send my information by email and another few minutes to review the results and digitally sign.

Most of my income is from W2 and some 1099 here and there. As others mentioned, America is backwards and the politicians and 1% keep fleecing it towards Romes fate.

I love seeing those on the top get fleeced for a change, unfortunately this will just be a slap on the wrist.

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@alephnan 3 months

Replying to @Kesseki 🗣

I'm curious how independent the FTC is from political pressure and lobbyists?

In the way there is a revolving door with the SEC, is there a revolving door at the FTC?

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@MobileVet 3 months

Replying to @Kesseki 🎙

Not at all affiliated but Free Tax USA appears to be a great alternative. They have been around for quite a while, but I have only used them this year as it was the first I heard of them.

Biggest downside is no import from brokerage, so if you trade a lot it could be annoying to create your schedule D.

https://www.freetaxusa.com/

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@jawshoeadan 3 months

Replying to @Kesseki 🎙



@perardi 3 months

Replying to @Kesseki 🎙

I know, I know, there’s so many dark patterns in TurboTax that it’s cliche to point them out…

…but man, this was a particularly egregious example I came across this year.

https://imgur.com/ojpLvRW

You can pay for TurboTax using your refund…with an additional $39 processing fee. That is just wild.

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@beej71 3 months

Replying to @Kesseki 🎙

Here's what's worked for me in terms of not paying Intuit any money (as a W-2 and 1099 earner):

If there's something you can't figure out, is risky, or a one-off, hire someone to do your taxes.

Then use that as a template for subsequent years to do it yourself.

Also, use the federal free fillable forms to e-file. They might be available for your state, as well.

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@zw123456 3 months

Replying to @Kesseki 🎙

A few years back I got audited, and it was called an "electronic audit" by the IRS. Which basically meant that they had their computer systems scour a bunch of the bank records and discovered that I had forgotten to claim a 1099 for some contract work I had. OK, so they sent me a computer print out and they had cross checked everything on my return electronically, my property tax deductions, my stock dividends so on and so on.

Ok, so if they can do all that automatically for an "electronic audit" why am I filing a return, just run that thing and send it to me and I can file an exception if there is something on it I disagree with.

I think the answer has already been identified in several other comments here, a heavy lobby effort on the part of Intuit, H&R and whoever else to keep it tricky and complex so you have to buy their B.S> software or services.

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@jprd 3 months

Replying to @Kesseki 🎙

I think we can all agree that discovery is going to be fun and lead us places we can only dream of.

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@daniel-cussen 3 months

Replying to @Kesseki 🎙

The Turbotax tax.

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@soorya3 3 months

Replying to @Kesseki 🎙

This is insane and I get PTSD during tax time. You know simple task of adding a state refund into turbotax took 2 hours.

I wrote to both of the representatives in my state, let's see what I hear back.

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@korginator 3 months

Replying to @Kesseki 🎙

This is band-aid for a fracture. Suing Intuit does not address the underlying problem.

It's not hard to collect income data automatically. Here in Singapore (as in many other countries) I get a message reminding me to check my tax data before the filing date. I just login and click "Submit". If I forget to do this, I may miss some deductions, but it goes through anyway.

Tax filing can be made simple enough that a layperson can do it without employing an accountant.

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@ed_elliott_asc 3 months

Replying to @Kesseki 🗣

Is there a way to do your taxes without paying any money?

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@foxyv 3 months

Replying to @Kesseki 🗣

Did my taxes this year using TurboTax like always. Sold some stocks this year and all of a sudden I am paying $90 for TurboTax "Premium" to put a couple additional entries in the 1040. What a racket. Next year I'm going to file using something else. This has gone on too long.

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@syastrov 3 months

Replying to @Kesseki 🎙

I wrote an article [1] a few years ago to vent about how messed up and backward the experience has been for especially foreign filers. The “free” options provided by commercial companies are as TFA states unusable by large portions of the population. Besides those, the IRS provides “free fillable forms online”, which looks like a scam website and also has many limitations (one of which, in my case, was that you must provide a US phone number). It’s all beautifully messed up.

So there wouldn’t be this problem with Intuit if the government got their shit together. Why not spend efforts to improve the system rather than litigation? The answer? Lobbying.

This is all in stark contrast to the system which exists in Denmark, where I live, where taxes are all filed online and the government automatically fetches most information so that you mostly only need to review it and add deductions.

[1] https://medium.com/@syastrov/us-tax-system-a-fractal-of-bad-...

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@daniel-cussen 3 months

Replying to @Kesseki 🎙

Turbotax is a tax on paying tax.

I like paying taxes to the State because that money goes to military and entitlements, and keeping the lights on. I do not agree with every military action, or every entitlement, but it's not my place to decide what direction the country goes in, it is my place to push.

I wonder how many orphanages Intuit runs, how much welfare they pay, where the bases they operate are, how many men they've put on the moon, to have the gall to demand taxes. That is an literally an act of sedition, literally a racket.

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@dang 3 months

Replying to @Kesseki 🎙



@pianoben 3 months

Replying to @Kesseki 🗣

Fucking finally!

Someday our descendants will have sane and automatic filing like the rest of the developed world; I can only hope to live long enough to see the death of this stupid industry.

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@Arubis 3 months

Replying to @Kesseki 🎙

Many users of this site aren’t especially price-sensitive; if you’re one of them and in the habit of using tax filing software, I urge you to consider hiring an accountant for your taxes. You’ll pay a couple hundred bucks, which may be offset by the CPA finding deductions or credits that your software didn’t highlight, and that money goes to someone you’ve picked out and hired rather than a corp that’ll use your money to lobby against your best interests. And you’ll save a bunch of time, which may be enough to make this worthwhile in and of itself for you!

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@macinjosh 3 months

Replying to @Kesseki 🎙

Pro tip: when I was doing my taxes TurboTax asked me for a survey. I complained bitterly about their lobbying. I was suddenly able to file fed and state free.

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@gjsman-1000 3 months

Replying to @Kesseki 🗣

> "In some TurboTax ads, "almost every word spoken is the word 'free.'"

Really? There are some TurboTax ads where every word spoken is the word 'free.' ;)

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@kn0where 3 months

Replying to @Kesseki 🎙

Good, but the situation is so much worse than just this. Most Americans could just use the IRS Free File system, which the article mentions, instead of ever giving money to Intuit or H&R Block ever again. But we don’t heavily advertise that system, because that would encourage people to use it, and if you’re going that far, you might as well let the IRS build its own tax software with all your information prefilled like they do in civilized countries.

As long as the job of Congress is to kiss the ass of every powerful industry lobby, we won’t have good things.

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@neycoda 3 months

Replying to @Kesseki 🎙

Yay!

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@webXL 3 months

Replying to @Kesseki 🎙

This is about as close as you can get to the government suing itself.

Turbotax is the dominant player in an industry created by the government. Tax prep fees are just another tax.

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@AdmiralAsshat 3 months

Replying to @Kesseki 🗣

Not just TurboTax, H&R Block does this shit as well.

"File your taxes free! Oh, you have to file an HSA contribution? Sorry, you'll have to buy H&R Block DELUXE ($79.99) to do that!"

Kinda feels like blackmail, really. If I don't file my HSA contribution I'm technically committing fraud, right?

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@notch656a 3 months

Replying to @Kesseki 🎙

The fact that our government doesn't have the collective intelligence to just mail the tax bill using the information it already knows, with the option for the recipient to submit corrections/deductions, is a testament to the utter failure of governance in the US. Fortunately having an ineffective government can often be a feature instead of a bug.

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@physicsguy 3 months

Replying to @Kesseki 🎙

From an outsider perspective, the US tax system is nuts.

Here in the UK, the tax year runs from April to April. Your employer reports exactly your taxable earnings to the government every month. You can log in online and see exactly what you're taxed on. You do not need to fill out a self-assessment at all - it's all done automatically, except for under certain circumstances which don't affect most of the population, but roughly:

* You have earnings over £1000 a year from outside of your normal employment (e.g. from interest on savings, selling things on eBay, whatever). * You are earning above £50,000 per year but want to continue claiming child benefit (which phases out between £50,000 and £60,000, so some needs to be repaid). * You earn over £100,000.

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@smcleod 3 months

Replying to @Kesseki 🎙



@bigjoedeez 3 months

Replying to @Kesseki 🎙

What's the problem? I file for free each year.

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@jeffrallen 3 months

Replying to @Kesseki 🎙

About. Damn. Time.

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@aidangrimshaw 3 months

Replying to @Kesseki 🎙

I'm working with other contributors on https://ustaxes.org, an open source tax filing webapp https://github.com/ustaxes/UsTaxes.

Currently, many Federal tax forms are supported, as well as tax filing for the state of Illinois. Filing for Oregon and California is under development!

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@tormock 3 months

Replying to @Kesseki 🎙

Doesn't H&R block do that too?

And they try to trick you at every step to "upgrade" to the paid version...

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@Bud 3 months

Replying to @Kesseki 🎙

Deceptive is right. I filed using TurboTax today. Federal return plus two state returns. Their "free" service ended up costing me around $180 even though I suspect my return is much simpler than most.

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@bick_nyers 3 months

Replying to @Kesseki 🎙

A dark pattern I just learned about with TurboTax, is that if you attempt to downgrade from paid to free when it is time to file (even without utilizing paid features), they force you to completely start over from scratch. For a lot of people, they may not even know they are in "paid mode" until it comes time to punch in the debit card.

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@chrisfrantz 3 months

Replying to @Kesseki 🎙

If you want to see an example, I took a screenshot[1] a week ago of the massive Intuit ad in Google Ads that blocks the results you may otherwise see.

1 https://twitter.com/frantzfries/status/1505942638704345094?s...

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@josephd79 3 months

Replying to @Kesseki 🗣

Government: You must provide a free way for those that qualify.

Intuit: OK.

Intuits exec to its employees: Make this free system, but hide it from the public. Provide links that are broken, make sure it doesn't show up on search indexes.

Scott Cook and all those involved should have all of their assets seized. About as slimy as you can get as a person. Made billions off of scamming United States citizens.

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@mikeInAlaska 3 months

Replying to @Kesseki 🎙

My last CPA had a dart board on his wall.

The outside was NOT DEDUCTIBLE.

The inner, smaller ring was DEDUCTIBLE.

The bullseye was DEDUCTIBLE UNTIL AUDIT.

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@sofixa 3 months

Replying to @Kesseki 🗣

As i mentioned on another thread[1], that's one of those American things that really don't make any sense after spending more than a few seconds about it. There is no legitimate excuse for things to be this bad. The best I've heard is that paying taxes being hard is good because it reminds you how much money you give the government, so you are more attentive how it's spent, but it doesn't really make sense either.

https://news.ycombinator.com/item?id=30842175

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@nimish 3 months

Replying to @Kesseki 🎙

eFile could be free too but it's an enormous pain in the ass to even get registered as an IRS developer.

IRS provides docs: https://www.irs.gov/e-file-providers/tax-year-2021-modernize...

but hides them from the public.

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@mike503 3 months

Replying to @Kesseki 🎙

Amusing. They lobby to keep the government and IRS complex, get sued back, but ultimately it’ll always be a net gain.

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@musicale 3 months

Replying to @Kesseki 🎙

Amazing it took them this long.

So when will Intuit be returning all of the bait-and-switch money?

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@decebalus1 3 months

Replying to @Kesseki 🗣

I hate TurboTax with a passion. At this point, the only benefit I see from it is the fact that because my taxes are boring, I just update the information from the last return. Which is something the IRS could do EASILY. Because of all the 'tax freedom' which has been lobbied in America, I now have to pay a private corporation, navigate countless dark patterns to make sure I don't accidentally sign up for Super AuDiTProTec™ at every step of the way (God forbid I sell stock or do something soo complicated), to do something the federal government is more than competent to do on their own.

Every piece of news in which Intuit gets slapped is good news to me. I just hope legislators start doing their jobs at some point and spare the taxpayer of this bullshit.

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@ChrisArchitect 3 months

Replying to @Kesseki 🎙



@Melatonic 3 months

Replying to @Kesseki 🗣

Credit Karma had a free tax filing application as of last year but as they were purchased by Intuit who knows what is happening with that....

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@briandear 3 months

Replying to @Kesseki 🎙

Let’s not blame Intuit for this. Blame the politicians.

Here’s Milton Friedman on the reason the tax code is intentionally complicated: https://m.youtube.com/watch?v=TruCIPy79w8

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@oneoff786 3 months

Replying to @Kesseki 🗣

A well deserved twist of the knife to do this right before the tax rush.

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@assuringllama 3 months

Replying to @Kesseki 🎙

In my country, we rarely use software or professional services for filing personal income tax. Not for most people unless you have special circumstances which are usually reserved for super high networth individuals.

What my local IRS did is sensible default. Employment income are submitted electronically to my IRS from most employers. Deductions and reliefs are automatically factored in if it relates to other government services (e.g. reliefs for child).

What I love most is for information that they don't have information on, such as deductible expenses for rental income, they suggest a default of 15% expenses where we don't have to provide any proof or documentation. It is a 15% deduction over the rental income that's just given to you. Of course, we can challenge it if we feel we should have higher deductions, providing them with the necessary documents.

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@JRKrause 3 months

Replying to @Kesseki 🗣

I manually filed a revision to a previous tax year in which I had accidentally double-payed state taxes on a schedule K-2 disbursement two years back. Without any background in this I was able to follow the IRS and state-gov websites to get everything together and ultimately received my check for the difference (many thousands of dollars). All without paying a dollar.

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@mwexler 3 months

Replying to @Kesseki 🎙

ProPublica has been hammering on this since 2019. Their series of investigations at https://www.propublica.org/series/the-turbotax-trap is very eyeopening, and teeth-gritting.

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@aclindsa 3 months

Replying to @Kesseki 🎙

I recently started an open-source tax solver, partly because I'm not a huge fan of Intuit: https://github.com/habutax/habutax

It isn't perfect since its a young project, but I've attempted to simplify and modularize the process of creating/maintaining forms to allow for that part to be crowd-sourced as much as possible (and I'd love your help!).

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@linuxhansl 3 months

Replying to @Kesseki 🎙

Finally!

First Intuit lobbies to prevent free tax returns by claiming that can provide their own (very sketchy) free service for that. Then they have the gall to opt out that very program which they used to prevent free tax returns in the first place.

I wish they would just go away.

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@markc 3 months

Replying to @Kesseki 🗣

I was 80% done with my taxes this year when TT suddenly demanded an additional $119 to list deductible expenses on income. That’s on top of $140 to file Federal plus 1 state. I’ve been using TT for 20 years. Never again.

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@ChrisArchitect 3 months

Replying to @Kesseki 🗣



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