Search engine stories at Techdirt.
from hide and seek department
For years, advocates for the non-wealthy public have offered plans to simplify the tax preparation process by having the IRS pre-prepare a tax return with the information it already has, send it citizens and allow those citizens to either sign and return it or prepare their own tax return if they think there are errors. Several politicians have offered versions of this plan, including Elizabeth Warren. The idea is that, for the vast majority of Americans, the IRS already has all the information it needs for filing taxes. Why force most people to prepare their tax returns when they don’t have to?
Well, for as many years, companies that make money doing this tax preparation work have been lobbying Congress to stop it becoming law. Intuit, makers of the TurboTax software, has been particularly active on this front, with new arguments that boil down to “But if you make this law, then we’ll make less money.” When that post became a public relations disaster, the company tricked a group of spokespersons into saying all of this for him.
Now, if this all sounds like sleazy shit, you ain’t seen nothing yet. One of the ways companies like Intuit fear its lobbying efforts will force the poor and middle class to pay for tax prep so simple it should be free is by pointing out that it struck a deal with the ‘IRS to offer theirs free programs for anyone earning less than $66,000 in any given year. While that’s true, ProPublica has a nice description of the extent to which Intuit in particular is going to hide this program from the very public it’s supposed to serve.
Intuit and other tax software companies have spent millions lobbying to ensure that the IRS does not offer its own tax preparation and filing service. In exchange, the companies struck a deal with the IRS to offer a “Free File” product to most Americans — but good luck finding it.
Here’s what happened when we went to look.
Our first stop was Google. We searched for “irs free file taxes”. And we thought we had found what we were looking for: advertisements from TurboTax and others directing us to free products.
Spoiler alert: these products didn’t end up being free. Despite ads mentioning “free” repeatedly, the researchers who profiled a housekeeper earning $29,000 for the year, the TurboTax site said free was not an option because the fictional citizen was an independent contractor. Instead, tax preparation would cost $119.99. ProPublica continued:
Then we tried with a second scenario. We went back to TurboTax.com and clicked “FREE Guaranteed”. This time, we went through the process as a Walgreens cashier without health insurance, entering personal information and giving the company a lot of sensitive data.
Again TurboTax told us we had to pay – this time because there is an additional form if you don’t have insurance. Load? $59.99.
According to the article, both instances are not kosher based on the agreement with the IRS. This deal is pretty simple: if you make less than $66,000 in the year, you can deposit for free, period. From there, the researchers dug into TurboTax’s source code.
Even though we clicked on the “FREE Guaranteed” option and met all the requirements to deposit for free, the company had marked us as a potential paying customer. In the source code, TurboTax had marked us as “NONFFA”. It means “Not Free File Alliance”. In other words, we weren’t on track to deposit for free after all. Even though TurboTax could tell we were eligible to file for free, the company never told us about the truly free version.
It turns out that if you start the process from TurboTax.com, it is impossible to find the truly free version. The company itself admits it.
So, although this site is filled with as many “freebies” as possible, you cannot access the free deposit at all. How many people do you think using the site to deposit for free make it to the FAQ page and realize their mistake compared to the number who accept what the site tells them and pay to deposit instead? Especially when “free” appears everywhere on the sites you can not deposit for free, but the actual free deposit site is called, sigh, TurboTax Freedom?
But let’s assume that most people access this FAQ. The researchers Googled “turbotax freedom” to see what came of it.
The first link was from TurboTax and said “Free File Program” right in the text. We clicked and it took us to this new page. While the orange “See if you qualify” link took us to the real free files program, the blue “Get started for free” link took us back to the version of TurboTax where we ended up having to pay.
Either way, it’s clear that Intuit is not living up to the spirit of the agreement it signed with the IRS. All of these shady tactics are obviously designed to prevent people from finding the free site, to trick the lower classes into paying for tax preparation work when they shouldn’t be, and to reduce the number of people who use it so much. as possible.
The payoff for all this sleazy behavior is calls from the same Congress that gets Intuit’s lobbying dollars to end the program for not achieving its goals. And, it looks like Congress is also considering legally prohibiting the IRS from offering a free program itself, because that certainly serves ordinary people.
Congress is now set to enact the Free File program, including its restriction on the IRS to create its own free service. We wrote about it earlier this month and about opposition to it from freshman Democratic Reps. Katie Hill, Katie Porter, Alexandria Ocasio-Cortez and others. The House eventually passed the bipartisan Taxpayer First Act, which also contains some provisions supported by consumer advocates, such as restrictions on private debt collection for unpaid taxes.
Now the Senate is considering the bill. His sponsors argued he was not tying the hands of the IRS, but outside legal experts we spoke to disagree. The text of the bill codifying the Free File program has long been sought by Intuit lobbyists.
On top of all that, to make matters worse, more information has come to light since ProPublica’s original post and the original writing of this article. In a follow-up post, ProPublic discovered that Intuit More precisely and actively de-indexed Google’s free search engine website with the robot.txt file.
The code on TurboTax’s Free File site says “noindex, nofollow” – instructions for it not to show up in search results.
In contrast, the TurboTax page that puts many users on the right track to paying signals to Google that it should be listed in search results.
Sen. Ron Wyden, the ranking Democratic member of the Senate Finance Committee, said in a statement that he plans to raise Intuit’s misleading marketing with the IRS. “Intuit’s tactics to reduce access to the Free File program and confuse taxpayers are outrageous,” he said.
Don’t expect Wyden to be the only congressman to get in on the act. Several of the Democratic presidential candidates are also members of Congress, and you can bet that’s the kind of topic many of them will be talking about. Elizabeth Warren in particular, as one of those pushing the IRS to create its own free filing program via legislation, should be an interesting watch here.
The end result of all of this is unknown at this time, but it looks very, very bad for Intuit. Again, Intuit has signed an agreement with the IRS to not only offer free filing, but to take steps to increase the use of it. Deleting the website where it can be done is about as much of a breach of that promise as it gets.
Filed Under: convention, free tax return, free taxes, irs, low income, search engines, tax preparation, taxes, turbotax