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TurboTax has the data and could have easily taken this step. The right thing to do would have been to proactively issue refunds to anyone making less than $34,000 who was eligible to file for free, but paid TurboTax to file. And then you have Intuit’s CEO, Sasan Goodarzi, who failed his crucible and chose to respond with spin over substance. Some CEOs respond with humility and contrition.

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Many taxpayers were duped into paying TurboTax despite being eligible to file for free TwitterĬompanies make mistakes, but the true test of a CEO is how he or she responds to these mistakes. As a thank you for her service, TurboTax allegedly charged her $124 to file even though she should have been eligible for free tax filing. The result? Users like an 87-year-old veteran with a gross income of $11,000 from Social Security and a military pension were steered toward paid products. (In the wake of ProPublica’s reporting, Intuit relented and changed the code, but that was after the filing deadline for 2018 taxes, meaning that many who searched and filed their taxes by April 15 had already needlessly paid). The second way Inuit deceived users was by adding “code on its site telling Google and other search engine not to list TurboTax Free File in search results.” Essentially, TurboTax told Google to suppress the site where people could actually file for free, an edition known as “TurboTax Free File,” no matter what they typed into the search bar. “It turns out that if you start the process from, it’s impossible to find the truly free version. Despite this agreement and obviously knowing that the individual is eligible to file for free, TurboTax never mentioned the free version. Remember, that according to the agreement to which TurboTax consented, an individual making less than $34,000 should be able to prepare and file her taxes for free, regardless of income source and other deductions. But after entering all the information, TurboTax displayed a page saying that she wasn’t eligible to file for free and would need to pay $119.99 to use Turbo Tax’s “Self-Employed” edition. ProPublica tried to fill out a tax return, for example, as an independent contractor for Task Rabbit who made $29,000 in 2018. Google search results for 'IRS free file taxes' For example, ProPublica ran a test searching on Google for “irs free file taxes.” As you can see from the image below, the search results make it seem as if a user is on the path to filing for free. Second, it suppressed the landing page of the truly free product so that it would never appear.”įirst, TurboTax placed misleading ads that masqueraded as the free file service, but, in reality, steered people towards its paying products. TurboTax’s obfuscation took two forms as ProPublica describes: “buying ads to direct people who searched for the truly free version to products where they would eventually have to pay. In other words, they want three things from you: your time, your money, and your data. In our research, we've found that designers of dark patterns have three main motives: making apps more addictive, nudging you to buy more, and getting around privacy protections.

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While there are perhaps many reasons for the limited usage-such as confusing and disparate eligibility requirements that depend on the software provider-TurboTax and other tax filing services also use deceptive design tactics, called dark patterns, to confuse and steer people away from truly free versions of their services.

As Nina Olsen, the National Taxpayer Advocate, summed up, “the fact that less than 3% of eligible taxpayers are using Free File suggests the program is failing to achieve its objective.” To contextualize, it is important to note that 70% of American tax payers are eligible to file their taxes for free online using the IRS’ Free File program. The usage statistics of the Free File program are absymal. In other words, TurboTax affirmatively opted in and committed to the IRS that it would offer free tax filing to lower-income Americans. Why would TurboTax and others agree to this? Because in return, the IRS committed not to compete and offer its own free online tax software to consumers.

TurboTax requirements to receive a free federal tax return IRS Free File website

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