Getting Better, Finally: Intuit's Shady Actions For Free File Program Lead To Change In IRS Deal

from the free-as-in-taxes dept

Going through the history of our posts on Intuit and TurboTax will give you an incredibly frustrating recent history of Intuit's bullshit actions regarding its free tax filing program for low-income households. This all stems from a deal the IRS cut with several major tax preparation companies, which amounted essentially to the IRS promising not to offer its own free file program so long as these companies, Intuit being the largest, provided free tax filing programs to the public themselves. The outcome of this naive deal cut by the IRS was to have companies like Intuit do everything possible to hide its free file sites from the public internet by delisting it from searches, then lying to customers to avoid refunding money when they complained that they could have filed for free, and finally Intuit similarly fooling veterans into paying for services that would otherwise be free all while wrapping itself in the American flag.

ProPublica did a bevy of fantastic reporting on all of this, leading to a fair amount of public outrage at how blatantly cynical Intuit behaved. It would be easy to be equally cynical in thinking that the IRS would simply sit and watch all this without taking any action. Perhaps to the surprise of many, however, it appears that the shining of the light on Intuit's actions has led the IRS to significantly change the deal it struck with tax prep companies in a way that should be very, very positive for the public.

The IRS announced significant changes Monday to its deal with the tax prep software industry. Now companies are barred from hiding their free products from search engines such as Google, and a years-old prohibition on the IRS creating its own online filing system has been scrapped. The addendum also expressly bars the companies from “engaging in any practice” that would exclude their Free File offerings “from an organic internet search.” ProPublica reported in April that Intuit and H&R Block had added code to their Free File pages that hid them from Google and other search engines, diverting many users to the companies’ paid products.

“The improved process will make Free File stronger and give taxpayers another reason to consider this valuable software option,” IRS Commissioner Chuck Rettig said in a statement. The agency hopes the changes will make the free option more accessible for taxpayers in the 2020 filing season, he said.

It may seem a bit much to expect the IRS to flip the script and offer its own fleshed out free to file program to compete with private companies in the span of a year or so. Still, reading the quote above, it sure sounds like that's the IRS' plan. It's something that absolutely should happen, as for most lower and middle income taxpayers, the IRS already has everything it needs to prepare simple tax returns. There is zero reason why anyone not filing a complicated return should pay any amount of dollars to Intuit instead of just verifying the information that the IRS needs to process a return.

It should be noted that the prohibition on the IRS offering its own free file program was the result of intense lobbying by the likes of Intuit. That makes it all the more funny to see how the company is pretending to react publicly to these changes.

In a blog post on the Intuit website, the company said, “Intuit strongly supports these changes to the Free File program and associated Free File offerings because they increase the focus on the taxpayer experience.”

That would be hilarious if it weren't so infuriating. Intuit and its peers had every damned opportunity to make the taxpayer experience the focus of its own efforts. Instead, these companies took every measure to hide its free file programs and websites and to trick the taxpayer into paying for a service that was supposed to be free.

That is, if nothing else, certainly some kind of customer experience.

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Filed Under: free file, irs, taxes
Companies: intuit


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  1. icon
    Norahc (profile), 6 Jan 2020 @ 5:29pm

    It may seem a bit much to expect the IRS to flip the script and offer its own fleshed out free to file program to compete with private companies in the span of a year or so.

    Doubt it will ever happen. The government takes in more tax money by having these third parties involved. First, they tax the individuals, then they get to tax the income the tax preparers and companies make from their customers.


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