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TurboTax Uses a “Military Discount” to Trick Troops into Paying to File Taxes (propublica.org)
170 points by kaboro 33 days ago | hide | past | web | favorite | 42 comments

Cheating service members can have consequences. We were TDY and put up in a hotel in Los Angeles, that was ripping off customers by removing placards that advised some local 7 digit numbers were now long distance. Both the hotel and the phone company were making extra money off this little scam. We advised the Area Defense Counsel of the practice and the military cancelled the contract with the entire hotel chain. The hotel chain never recovered from that loss.

I presume something similar could be done here. i.e. contact the ADC for each branch and advise service members are being taken advantage of. The military could send out a memo globally suggesting how to file for free and to not use TurboTax.

I sure hope so. This is not acceptable, especially when they're being paid by the taxpayers- so not only is Intuit dipping once, they're double-dipping.

Why, oh why, do they deserve to exist anymore? This is not cool. Unfortunately, I expect that they'll get either nothing or some flavor of penalty that'll only momentarily stun them.

Not to mention the fact that class-action lawsuits disproportionately help the lawyers get money out of it, either.


I use ArgoCD professionally and Quickbooks personally. Their stuff is pretty good. It's hard to blame them for participating in the tax return scam when everyone in their industry does it.

No, it is not.


My wife and I normally file with turbo-tax, and usually end up owing money to the government. This year was different, and we actually got money back.

We have to pay to use turbo-tax (like 39.95 or whatever). When it was asking how we wanted to pay, there was an option where it could be taken out of our refund. We selected this; and were about to hit submit before we noticed that 39.95 figure twice.

Turns out they were going to charge us 39.95 to use their product, and (I doubt accidentally) 39.95 to pay them out of our refund. We sprinted back, chose to pay with our card (which was free) and filed.

I felt like I needed to shower after.

I had the same experience LAST year when I used them as well. It is no accident that the normal fee is the same as this surprise additional fee to pay them out of the refund. Deliberately meant to go under the customer's radar.

Fuck, really? I used that option, they nailed me. God damn.

Noticed the same.. definitely intentionally misleading.

TurboTax is one of the most aggressive rent-seekers out there. I consider what they do to be so unethical that I try to avoid Intuit's other services even though they're very useful. (I also don't love how Intuit has done its best to run Mint into the ground after acquiring it.)

Intuit is one of the largest players in San Diego's tech scene, but I will never, ever work there for precisely this reason, despite the fact that they are almost always hiring/recruiting and offer competitive compensation packages.

The problem for me is that they appear to be total scumbags.

what's the range you see for "competitive compensation"?

AFAIK a "senior" dev there can expect to make just shy of $150K, which is just about slightly above-average for SD for a large company (excluding the defense industry, which depresses the average, and there's a lot of it)

Many junior devs can have a starting salary of $120K-150K and senior starts at $200K+ imo for large companies

Not in San Diego

I switched from QuickBooks to Xero. If your business isn't that complicated it works well.

I always thought the liberty tax places looked shady, but they have had a free no-income cap online filing system for at least 3 years. I've used it every year. They call it DIY tax, but the site is freetax.com.

Intuit has weaponized tax filing against the American taxpayer for great profit. Their lobbying efforts are very impressive.

While I agree with Intuit being complete rent-seekers, I don't think it's "weaponized". It's every-day lobbying (aka corruption) to limit government from doing what many other countries do successfully: automate tax filing.

Lobbying is not the same thing as corruption, and conflating the two does not help the conversation or address the problems with either.

How are they different, for ignorant people like me?

Lobbying is legal. There's plenty of good reasons for it, for example some tech companies lobbied against net neutrality, which I certainly wouldn't call corruption.

Does being able to lobby for good things as well as bad things make it better? It's still essentially bribing the government to do something other than what's in the best interests of the public?

So lobbying is legalized corruption then? Also why is net neutrality bad?

Whoops, I meant for net neutrality.

Oh I think you can easily equate unconstrained corporate lobbying with corruption.

A lot of the western world's focus on corruption in other countries comes down to the fact that good old "pay an extra $50 to get your building permit approved" can't be sucked up by large corporate rent-seekers. Trump can build whatever garbage he wants but good luck adding that extension to your 1-1/2 bedroom house.

Or, that white-collar crimes are essentially bought off or legislated out of existence, while quality-of-life and low-level drug offenses can't be bribed away.

Absolutes don't help the discussion. Corporate lobbying is indeed corruption by the rich in many, many cases. Just because there are legitimate functions for lobbying doesn't mean it's not corrupt elsewhere.

We can't blame this one on the icky lobbyists, though. It's pure exploitation of dark patterns, which means the people with responsibility here are people like HN readers -- PMs, designers and programmers, not lobbyists.

(Heck, some of them may be HN readers.)

Can't we though? Isn't Congress planning to permanently ban the IRS from providing online tax-prep services itself in an attempt to permanently entrench this pointless and corrosive marketplace?

I'm happy for someone to correct me, but my understanding is in exchange for the IRS to work with these companies on their free service the IRS wouldn't /run/ a competing free service and the contract was renewed every couple years. The IRS could develop something, but couldn't launch it until the contract expires...which would take a few years, anyway.

Those terms didn't seem that unreasonable to me.

> Those terms didn't seem that unreasonable to me.

You don't think it's unreasonable that the IRS is precluded from making better services available to American citizens?

...in exchange for a partnership between private companies offering a free service. Other than the non-compete from the IRS, I'm not exactly sure what these private companies get out of it? If they're hiding access to their free filing, then its not to up-sell. In 2007, they stopped allowing things like loans against returns.

Feel free to have a different opinion on this. The program has been around since 2001. This bill just extends the same program. The government hasn't historically had a great track record with developing web services. I see things getting better with things like the USDS, but that was only formed in 2014 and Congress keeps cutting back funding of the IRS.

The current contract expires in 2020. I can't see why its a big deal to extend it. The specific language is “to not enter the tax preparation software and e-filing marketplace.” and my understanding is that it doesn't preclude development, just launching it.

But I would love if the IRS would develop a first party solution.

Well, we've seen what their "offering a free service" is worth. They hide it and trick people into paying.

Yes. Only 3% of people use it when 70% of people qualify. I hope that changes after all the news this year about them attempting to hide it from Google.

So the US got a half-hearted program where 3% of Americans could file for free in exchange for promising not to have a program they weren't going to do anyway.

I really wish paying taxes in the US was done with Open Source software, like I understand Brazil has. I wish the IRS mailed you a post-card if you took the standard deduction like the UK, and many other countries do. But making noise over extending this program doesn't get any closer to things like that. I just think all the energy over this specific issue is misguided and overblown.

California does have a state run website for filing basic taxes. For as many dark patterns "the big guys" use in their free product, it's still way better than California's site.

There was a news story recently about Congress literally barring the IRS from ever offering their own service, which is quite different. I don't know if it passed or not...

Yes. That's exactly what I'm talking about. The bill would extend the program that's already in place and has been since 2001. Right now it's currently set to expire in 2020. The specific language is “to not enter the tax preparation software and e-filing marketplace.” which doesn't prevent them from developing their own solution--only launching it while the non-compete is in place.

I'd love for the IRS to offer their own solution. I just don't see it happening under this Congress and I think it would be difficult even if Democrats took control of both houses. Congress has starved the IRS funding for years and the US government hasn't been particularly good at developing web services.

I'm not sure if this is a permanent ban because I haven't read the bill, but I think it was exaggerated in the news. I don't see why it couldn't be reversed as part of a serious effort to roll something out.

The bill was HR 1957 https://www.congress.gov/bill/116th-congress/house-bill/1957... The program is called Free File https://en.wikipedia.org/wiki/Free_File and the tax prep companies are part of the Free File Alliance https://en.wikipedia.org/wiki/Free_File_Alliance

Why does Congress need to pass a new law to prevent the IRS from breaking a non-compete contract? Does normal contract law not apply?

I'm not sure I follow you. The current law was passed in 2015 and carries it through 2020[1]. I could be mistaken, but if no action is taken the program would expire on both sides. I'm not quite sure what the tax companies get out of free filing other than the non-compete from the IRS. The tax companies hide their free program, so they're not getting upsales. In 2007 they agreed not to offer loans against tax returns.

[1] https://www.accountingtoday.com/news/irs-renews-deal-for-fre...

So ... if they ran an API, and open sourced a client, would they be running it? ;)

This sounds like stupidity not malice. There’s clearly a usability issue when different UI flows charge the same person differently for the same service.

Edit: that’s just it. I don’t believe there was a meeting where a PM sat down and said “muhaha let’s make our UI confusing to screw service members.” That’s ludicrous. What likely happened is substandard engineering practices created an overly complicated UI and then failed to correctly handle all cases due to poor coding.

I believe the appropriate term for such an experience is dark pattern. It takes extra effort to blame the user when the intention of the experience is deception (a lie).

Evidence that the lie is intentional is this:

To find TurboTax’s Free File landing page, service members typically have to go through the IRS website. TurboTax Military, by contrast, is promoted on the company’s home page and elsewhere. Starting through the Military landing page directs many users to paid products even when they are eligible to get the same service for no cost using the Free File edition.

An Intuit press release this year announced “TurboTax Offers Free Filing for Military E1- E5” — but refers users to TurboTax Military and does not mention the actual Free File option. (E1-E5 refers to military pay grades.)

That's just a custom "fuck you" page for the military. Its the same process for every taxpayer.

This doesn’t pass the sniff test, given Intuit’s long history of anti-consumer practices.

> “muhaha let’s make our UI confusing to screw service members.” That’s ludicrous.

Considering this is Intuit, it does NOT sound ludicrous.

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