Journalism in the Public Interest

How the Maker of TurboTax Fought Free, Simple Tax Filing

Intuit, producer of the top-selling tax software, has opposed letting the government do your taxes for free – even though it could save time and headaches for millions of filers.

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Marc Johnson

March 27, 2013, 10:34 a.m.

I have been preparing taxes for many years. I used to do taxes for one of the major tax prep firms. You would not believe the “quality” of people that they hire. They follow a script in order to process your returns. It is sad to see many people pay $300 to $400 to have a simple tax return done.

My advice for the simple fillers is to get a bank account, file for free or under $100, and to have their refund automatically deposited into their accounts. I have seen many fillers that have no bank accounts get a refund of over $7,000. They take that money and spend it right away.

All the recent regulations for the independent tax preparers are nothing more the a federal cash grab and a way to line the pockets of the friends of politicians. Why do I have to pay $100 for a worthless class or $70 to have the right to file? No extra benefits for the tax payers.

Robert Clark

March 27, 2013, 11:39 a.m.

I’m opposed to making it easier to do tax returns.
It is a good thing to constantly remind us how our screwed up government extorts our money and literally throws it to the wind (or Solendra , whatever).

Keep the pain, nothing like filing that return on April 15th to remind us of this.

G Joubert

March 27, 2013, 12:27 p.m.

For people who itemize deductions beyond charitable donations,  prefilled returns is a bogus idea. Many such deductions, along with most tax credits, vary significantly from year to year. This needs to bedone line by line anew each year.

A prefilled return is about as helpful as last year’s return, which is helpful, but only to a point. It’s a starting point, nothing more.


March 27, 2013, 1:42 p.m.

Robert Clark, to help folks really feel the pain, end withholding by employers. Why should they be required to do the governments dirty work.


March 27, 2013, 2:11 p.m.

It’s amazing that some people - replying here- are totally unaware of the function of a constitutional republic…. and what we’ve become. A Socialist redistribution welfare state. The government competes with no one. It doesn’t compete with business, it meddles in it. It doesn’t compete with other institutions such as education or mariage, it meddles in it. . . with your tax dollars, and your votes. Take note: Today as it was in the Carter era for every dollar that goes into the treasury, about 11 cents comes back to the people. Red tape, government payrolls, and operational costs sucks up the rest. (what’s worse today, none of these people in the administration ever ran a business) When Regan was finished, about 31 cents came back to the people…. GOVERNMENT IS NOT THE ANSWER! PERIOD. They are the most unaccountable group of people on the face of the earth.


March 27, 2013, 2:52 p.m.

I love Grover Norquist’s rational for opposing this - that it would help the government collect taxes in a more efficient way, thus giving the government more money. That man is a nut.

I also love how the very same people who preach the gospel of free markets don’t mind bribing the big bad government to squash their competition for them. And honestly, if Intuit is afraid that they won’t be able to compete with the IRS’s free service, they shouldn’t be in business.


March 27, 2013, 3:15 p.m.

No doubt that crony capitalism is a big problem however you do not eliminate it by giving it more to eat. Largest Federal Individual Income Tax revenue was in 2007… may be eclipsed by this year.


March 27, 2013, 9:09 p.m.

Some of these comments baffle me.  Why would you hand over a service to the government that has traditionally been a role fulfilled by the private sector, including companies like Intuit, H&R Block, all the way down to your local CPA (who spent a lot of money to earn their creds)? In this day and age we should be looking to turn more government services over to the private sector, the government is too big and bloated already and since when do they provide fast and efficient services anyway?
This comment in particular: “Tax preparers like Intuit are simply parasites on the population.  They need to find a business niche that actually provides some value to society.” That is exactly what tax preparers do…. provide a business niche (service) that provides value!
I’m not going to trust the governments math if they provided my return, I’m going to want to double check it, and what am I going to use to do that? Tax prep software or an accountant! So at that point I might as well send it in myself and then there are less people for the IRS to hire. Not complicated…
Seriously, who wants more government in their lives?


March 27, 2013, 9:12 p.m.

Also… ProPublica: Don’t you think your headline is just a bit misleading? Sounds like something I’d see on Fox or Huffpost (polar opposites who drag people in with sensational crap)


March 27, 2013, 9:41 p.m.

To Matti: You live in Finland right? Right, so you are used to the government providing for you from cradle to grave…. So please keep your opinions about America and its Tax problems to yourself.  Feel free to become a US Citizen if you’d like to complain about us.


March 27, 2013, 10:55 p.m.

If the government doesn’t directly accept my tax information online, then aren’t they failing to take advantage of incredibly practical technology? It all strikes me as a little backwards and esoteric.

Nissan sold cars online in 1985. By 1995 existed. By 1998 you could buy stamps online. It is now 2013, and self driving cars are right around the corner.


March 28, 2013, 12:57 a.m.

If you are filing tax in Canada, try It’s available for most provinces and free (voluntary optional donation).


March 28, 2013, 2:34 a.m.

To Meg: Yes I do live in Finland. I’m sorry if it felt like I was complaining. I’m just a fan of the ProPublica -journalism and this taxing business intrigued my mind.

I won’t apologize the fact that I do have my opinions about things - as every single human should have. The reason that I comment online articles (and such) is that I wan’t to learn and dig deeper behind the subject of the article by communicating. In addition, as people share their opinions and comment on mine, I become more aware of the imperfections of my own thinking.

What comes to the government “providing” us from cradle to grave, in my opinion we, the people simply help the most disadvanteged of us via government. To be honest, I’d be more than happy to pay even more taxes.

Marc Johnson

March 28, 2013, 8:30 a.m.

Matti, you are more than welcome to pay even more taxes if you want. If you don’t think you are paying enough, then just send a check or two to your local or federal governments, I’m pretty sure that they are going to be more than happy to accept your kindness.

The problems governments are having is not due to decrease of revenue, but due to increases in spending. In the US, the IRS has reported record revenue levels. At the same time we are having trillion dollar deficits year after year. In the Euro zone they are also experiencing huge deficits.

What’s the problem? We have more money coming in, but we have these huge deficits. How can that be? The problem is that the government is spending way too much. As the populations continue to age this problem will get worse.

We have promised to much to our future generations through the cradle to grave mentality. It’s not we the people that have promised, it has been our governments that have promised our future earnings. Until we as a society can learn that cradle to grave government is not the solution, then we can be rest assured that we are doomed.

Ronald Leder

March 28, 2013, 2:32 p.m.

ProPulica is obviously one-sided and ideologically committed. The article doesn’t explain or make the case that the government would have to build the software and support customer (taxpayer) service - at government expense - that Intuit and private industry provides. The cost to government, for a program the public may likely dislike, would be in the tens of millions of U.S. dollars.

Marc Johnson

March 28, 2013, 3:17 p.m.

Ronald, the cost for a program to cull the data provided to the government in order to determine our tax expense or tax “refund” would not be in the tens of millions, but it would easily be in the hundreds of billions. Even though the IRS can already calculate your liability if you short pay, they still would “need” to create another massive government program to handle it.

Louise Carroll

March 28, 2013, 3:43 p.m.

Liz Day’s article failed to mention the massive chuck of free tax preparation services that are provided by volunteers across the country each year: the VITA program (1.5 million tax returns prepared last year), the AARP Tax Counseling for the Elderly program (2.6 million taxpayers served last year), and other nonprofit-delivered free tax services for low and moderate income residents. For 25 years, my organization, Tax-Aid, has delivered free income tax services to the San Francisco Bay Area community through the direct service of our trained volunteers. Since 2001 we have prepared these returns through Intuit’s professional tax software Lacerte, which the company has provided to us for free each year. In addition, Intuit hosts events around California that Tax-Aid participates in — not only to help residents prepare their returns with the TurboTax product offered through IRS Free File —  but also to connect people to essential services like Medi-Cal enrollment, flu shots, and food banks. People should know they have many alternatives when it comes to free tax preparation and e-filing and, in response to this article, they should also know Intuit is a company that cares about the LMI community. In part due to their support for nonprofits like mine – in California and across the country – together we have been able to do a lot of positive work to serve low income taxpayers for free.
Many alternatives have existed for decades in addition to “hiring a tax preparer” or “using commercial tax software” which are the only options Ms. Days lists in her article aside from “return-free filing”. It’s critical that people are aware of VITA:, the AARP’s program:, and Tax-Aid


Louise Carroll
Executive Director


March 28, 2013, 6 p.m.

The program would be VOLUNTARY, so I don’t really understand the opposition to it. I’d use it in a heartbeat as my taxes are fairly simple. As it stands, I use TurboTax, although after reading this, that ends now.

John Noble

March 28, 2013, 7:13 p.m.

Back when I lived in the UK, I never filed a tax return. If you’re a normal person with a normal job, tax paid at source, your tax “just happens”. You only need to do a return if you have anything interesting to declare, and then it’s a relatively simple affair.

Here in Australia, I pay an accountant $125 to prepare it for me and routinely get a $4,000 rebate. (I work as an IT contractor and have unpredictable weekly income, but am taxed as if I was earning as much as I possibly could, hence the refund.) That process takes around two hours.

The USA seems to make this more complicated than it needs to be. I can’t say I’m shocked.


March 29, 2013, 4:30 a.m.

I Studied Your Article.Thank you for sharing


March 29, 2013, 6:04 p.m.

these are the worst kinda people.  their website runs a mean bait and switch, the bbb dosent seem to care.  seriously.

J.S. Livacich

March 29, 2013, 7:31 p.m.

Oddly, there has always been little support for the standing of the individual tax payer and the standing for the taxpayer in tax disagreement and in the filing of returns. Senator Fred Harris tried in the post Watergate era to make changes in the system, but found that there seemed to be a feeling that there was greater political capital in allowing popular anger and outrage than reforming the system.


March 30, 2013, 9:20 a.m.

Yes many times the issue is more beneficial to a future campaign than the credit for resolving the issue.


March 30, 2013, 1:29 p.m.

This remind me… I need to contact Intuit and ask for a refund… they badly screwed up parts of my state (MN) return this year.


March 31, 2013, 11:27 a.m.

The IRS should provide full access to the required data through a well documented API.  While simplifying the tax code would help, it is not required to achieve the goal of a low cost “one click” file.

All they need to do it make all of the information required for a “one click” file available, and somebody will implement it.

It would be interesting if the IRS created a free open source product for online tax filing.  They would need to get states and cities involved as well.  They would not host or run the application, but they would allow anyone who wanted the code to use it as a starting point for their own system.  Then the barrier to entry would be lifted, and creating a “one click” tax filing system would be trivial - and the cost would drop—- probably to $0.

Look at NYC and their public transit data - they don’t build Apps, but they opened up their data through an API, and they let developers build the Apps.  The key is providing the required data in a well documented, easy to consume format.

Alan Polonsky

April 1, 2013, 7:37 a.m.

Even for people filing complicated returns, those with substantial income, numerous investments, numerous 1099’s, and itemized deductions, having the ability to download all of the information the IRS already has for you would be helpful. At the least, it will allow you to verify that you are not missing something, a lost 1099, or misclassifying some income.

Intuit is useful to fill out the return, mainly to avoid mathematical mistakes. It is no substitute for tax knowledge in a complicated return.

For people with just wage income and limited or no investments beyond a bank account who would not benefit from itemizing deductions, this would be extremely quick and useful.


April 1, 2013, 12:41 p.m.

Privatizing our tax system is not the way to go. Do you really trust the government to give you the deductions and credits you deserve? The IRS partnership with the Free File Alliance, of which Intuit is a member, is one of the most successful programs in existence. It would cost the IRS (and taxpayers) and immense amount of money to do what Free File does for free. More than 36 million returns have been filed through the program, and 98 percent of users are satisfied with it.


April 1, 2013, 12:48 p.m.

Why would I want the government doing my taxes for me? I sure don’t! It’s a total conflict of interest. Plus, there’s no comparison between our tax system and that of other countries that have return-free filing. We have many more deductions and credits. I sure don’t trust the government to give them to me.


April 1, 2013, 12:50 p.m.

It would cost the IRS (really taxpayers) hundreds of millions of dollars to do what the Free File Alliance does for free. Why mess with something that works? I don’t want the government doing my taxes, and I don’t want to pay for the government to do everyone else’s.


April 1, 2013, 5:41 p.m.

Flat tax seems like an answer. However to raise the flat tax needs to be voter controlled in the national election. Otherwise it seems to me that the wolves in the chicken house could raise at their whim. Flat tax may not hurt the more affluent but it can disproportionately harm low income workers. One might argue that the low income worker needs to pay their fair share.

Some say the IRS have some 115,000 employees now. Will the free-filing,  prepared returns pair down their employee count, I suspect not. Employed numbers by the IRS not very transparent. Can’t argue that it is not in governments self interest do not be top heavy for one needs only to have listened to recent discussion on the debt/deficit reduction debate.

It is a fact, that turning over to government what you can do for yourself is fraught with danger, I agree it has Pepe’ Le Pew spray written all over it.

Simpler tax code sounds like a good idea. Question will the flat tax also include flat tax for business based on their size? Will Congress stop tax loopholes that give deductions for corporations that have enterprises in foreign lands? Will government stop the corporations from writing tax codes (read loopholes) that benefit them.

Its a fact that whatever government touches at the Federal ends up as one poster said “dust”.  It will always benefit government at the citizens expense.

I see no problem that people in the tax preparation nor those like Intuit who provide software (at millions of investment) make money. Individual choice to use/purchase or not.

If you are one that does not trust our Federal government now what would change that view if the IRS was given more power?

To me this whole idea needs considerable debate. We should not turn over to the government simply because it seems to be easier.

To turn over one’s responsibility to the nanny state easy but it will not be easy to claw oneself out of their pit.


April 2, 2013, 8:21 p.m.

Oh yeah!  I never understood why the IRS did have this service online, since they have all the info in the first place.  This is the LAST year I will use Turbo Tax.
I had also notice that all the free online services that the IRS sent you too, are really full of restrictions so that not many people can use them.  IRS, GO ON LINE!!!  We the People request it.


April 3, 2013, 11:12 a.m.

“Intuit argues that allowing the IRS to act as a tax preparer could result in taxpayers paying more money. “

Only because they also oppose reforms which would eliminate the complex “overpay and hunt for deductions” system and make everyone pay exactly the same tax rate no matter who “prepares” the filing.


April 4, 2013, 4:16 a.m.

As long as it is VOLUNTARY, I don’t see the problem.  I am betting that other outfits (or some group they belong to) are trying to block this as well.  Complex returns can cost many thousands of dollars to have properly prepared—each year. 

Thngs are getting much more automated, for example, with investments.  I was pleasantly surprised this year when my new broker had automatically filled out the form 8949 that had all my stock and option trades, to be attached to schedule D.  It looked complete and correct to me and my tax preparer.  For tax year 2013, all brokers must provide this information, so it’s not like software pulling that onto the right form should be difficult.

1).  They could do it for everyone, flagging any preparers where they can’t, and noting which forms need manual attention, and why.

2).  Each taxpayer could decide how to handle it, including hiring a paid preparer to review everything if they wanted. 

3).  For everything but really complicated stuff where legal or complex decisions are needed—not doing this automatically seems absurdely inefficient for everyone.  (Again, it should be VOLUNTARY and should always be reviewed). 

4).  And, the IRS could spend more of its time reviewing the really complex stuff, where mistakes are more likely.

Bill Aikman

April 5, 2013, 9:01 p.m.

Please!  A much better idea would be to eliminate all income tax- effectively eliminating the biggest government agency, the IRS, which is mired in mismanagement.  Adopt a consumption tax, which you pay only when you purchase something.  So you get 100% of your paycheck each month and everyone pays taxes.  The government collects taxes from retailers not individuals.  This is called FairTax and its a great idea.  You need to read about it without injecting politics into the equation.  It will more than fund every social program you can imagine.  Read for yourself.


April 5, 2013, 11:22 p.m.

Even better than that eliminate the 16th and 17th amendments so there would be no Federal income tax and the US Senators would once again represent the interests of the States that appoint them. Have the US Congress set the annual Federal budget and revenue requirements for the coming year and that revenue is then apportioned to the States to raise as they wish. Having the State legislatures appoint the Senators help assure the US Congress will not stick the States with unmanageable revenue requirements.


April 6, 2013, 11:09 a.m.

I think it sounds like a great idea.

At least it would if the people working at IRS had a firm understanding of the tax code. Studies have shown they do not.


April 7, 2013, 3 p.m. = no tax forms at all.


April 7, 2013, 3:27 p.m.

FairTax is for economic neophytes.

Just like the flat tax, it unjustifiably favors the wealthy, only moreso. These people did not become wealthy by spending every dollar they earn. And with the stupid FT system, you can’t tax what you haven’t spent.

Neil Boortz is an idiot, and no better than Grover Norquist. In fact, his ideas are worse.


April 11, 2013, 12:39 p.m.

Nice to know that someone like John thinks the entire accounting industry can be replaced by a laptop. Well, John, taxation is the tip of the iceberg in the accounting profession. Nice to know that so many still see us as bean counters wearing green eye shades. Even if there were no tax laws at all, a successful business would still require accountants to effectively run. Your ignorance of what accountants actually do is showing.

I think this is a horrible idea for a number of reasons.
1. Voluntary or not, it is a bad precedent for the government to essentially send you a bill that you must respond to. And let’s not forget the cost of actually producing all of those documents and getting them to taxpayers…and don’t forget those that have moved, died, etc.
2. I have serious doubts that the IRS can process all of this data in time. Often, it can take a year or more for the them to identify a mismatch between data you report and data they receive from other sources.
3. I think it is fairly obvious that any changes made by a taxpayer would increase their chances of being selected for an audit.
4. Many people would miss deductions and tax breaks they would otherwise be entitled to. Trust me…I have seen people’s eyes glaze over when discussing the simplest of tax returns and concepts. Tax preparers and programs like Turbotax can ensure that taxpayers take deductions they are entitled to.
5. I have little faith that the IRS and all states will agree upon a single filing system. This means that people required to file state returns will still have to go through this process and find a way to efile with their state.


April 15, 2013, 5:59 p.m.

Why not simplify the tax code so you don’t need such a complicated return (software or paper)?

Steven Hall

April 15, 2013, 10:08 p.m.

Who the heck do our elected representatives think they work for? Obviously not we Americans, the voters, Clearly the special interest lobbyists of large corporations and industries. When and how will this stop? Our governance system is totally broken and out of control of the voting public. May our democratic experiment RIP. It’s over


April 16, 2013, 9:24 a.m.

Our Federal elected officials in office only for one reason, the voters put them there directly (House and Senate) or indirectly through the electoral college (Executive). Nobody else to blame but the voters… corporations do not vote, money does not vote.

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