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FTC sues Intuit for its deceptive TurboTax “free” filing campaign

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Re: FTC sues Intuit for its deceptive TurboTax “free” filing campaign

#471

Post by sschueller »

cmutel wrote: post #462
softveda wrote: post #328

Earlier quoted context omitted.

This is how is works in Australia. The Australian Tax Office will pre-fill your tax return online with income from your wages, interests, managed fund distributions, dividends etc. That maybe enough for simple tax returns, you can just accept their values and submit. What they don't know is your income from sources like rental income or crypto. They also don't know deductions you are going to claim. In this case you…

Since we're having the semi-annual "how do taxes work in other countries" thread, here is my experience as an American living in Switzerland. Though I have been here a while, I still find it interesting and a little weird. At the beginning of the year, you get a bill for that year based on what they think you will owe. This bill is due on October 31, i.e. you need to pay your estimated income tax before you have earn…

You forgot the part where you need to also file and pay US taxes although you may no longer be living there, have any income or assets there but you still need to pay as long as you hold a citizenship or green card.

Re: FTC sues Intuit for its deceptive TurboTax “free” filing campaign

#472

Post by PaulDavisThe1st »

briandear wrote: post #413
PaulDavisThe1st wrote: post #371

Earlier quoted context omitted.

The central problem is the refusal of US governments (state & federal) to pay people money to do things they want to encourage rather than give them tax credits and whatnot.

Taxes shouldn’t be used to get people to do things or not do things. Taxes should be used only to fund the essential services of the government: common defense, a legal system to enforce contracts, and that’s about it. When taxes are used as a means of control, that’s totalitarian. Tax policy should always be neutral.

Technically there's no difference between the government deciding to:

  1. give everyone who does X US$300
  2. give everyone who does X a US$300 tax credit
Both rely on the collection and disbursement of government revenue, which is typically accomplished via taxation.

However, 1. does not introduce any new clauses to the tax code. 2., by contrast does, and it generally functions as a slow steady drip, drip, drip of new clauses.

We therefore end up with an extremely complex tax code, instead of a simple tax code, and legislative acts to pay people for doing things we choose (via political process) that we want done.

Re: FTC sues Intuit for its deceptive TurboTax “free” filing campaign

#473

Post by syastrov »

I wrote an article [1] a few years ago to vent about how messed up and backward the experience has been for especially foreign filers. The “free” options provided by commercial companies are as TFA states unusable by large portions of the population. Besides those, the IRS provides “free fillable forms online”, which looks like a scam website and also has many limitations (one of which, in my case, was that you must provide a US phone number). It’s all beautifully messed up.

So there wouldn’t be this problem with Intuit if the government got their shit together. Why not spend efforts to improve the system rather than litigation? The answer? Lobbying.

This is all in stark contrast to the system which exists in Denmark, where I live, where taxes are all filed online and the government automatically fetches most information so that you mostly only need to review it and add deductions.

[1] https://medium.com/@syastrov/us-tax-system-a-fractal-of-bad-...

Re: FTC sues Intuit for its deceptive TurboTax “free” filing campaign

#474

Post by pm90 »

legalcorrection wrote: post #466
dguest wrote: post #453

Earlier quoted context omitted.

I know people who have optimized this: - they fill out their taxes with rough estimates, - the IRS helpfully corrects their errors, and sends the form back - they sign the corrected form, send it back - the IRS accepts the second round. This is basically the same "pre-filled" workflow as every other developed country. The difference is that we have a first round where you put in a semi-plausible effort to placate the…

Beware: if you owe the government money due to your mistakes, you will have to pay penalties and interest.

The main thing in this strategy is that your estimate is pretty close to the amount owed. So you may overshoot or undershoot, but likely by a pretty small amount, which is likely to make the difference owed small. I guess it could be considered a cost of filing taxes.

Re: FTC sues Intuit for its deceptive TurboTax “free” filing campaign

#475

Post by makeitdouble »

nathancahill wrote: post #287
zw123456 wrote: post #271

A few years back I got audited, and it was called an "electronic audit" by the IRS. Which basically meant that they had their computer systems scour a bunch of the bank records and discovered that I had forgotten to claim a 1099 for some contract work I had. OK, so they sent me a computer print out and they had cross checked everything on my return electronically, my property tax deductions, my stock dividends so on…

Government: You owe us money. It’s called taxes. Me: How much do I owe? Gov’t: You have to figure that out. Me: I just pay what I want? Gov’t: Oh, no we know exactly how much you owe. But you have to guess that number too. Me: What if I get it wrong? Gov’t: You go to prison Source: https://twitter.com/jordan_stratton/status/11181414550616719... I dig this one up every April.

The alternative is:

Gov’t: You owe us money. We took the amount we want directly from your income.

Me: But shouldn't the amount be lower because of X and Y and Z ?

Gov’t: Send us all the right paperwork and we might give you back some of what we took if we agree with your claim.

I actually like this version better (and it's also what I am used to), but I'd see people being uncomfortable with that arrangement.

Re: FTC sues Intuit for its deceptive TurboTax “free” filing campaign

#476

Post by kristopolous »

legalcorrection wrote: post #466
dguest wrote: post #453

Earlier quoted context omitted.

I know people who have optimized this: - they fill out their taxes with rough estimates, - the IRS helpfully corrects their errors, and sends the form back - they sign the corrected form, send it back - the IRS accepts the second round. This is basically the same "pre-filled" workflow as every other developed country. The difference is that we have a first round where you put in a semi-plausible effort to placate the…

Beware: if you owe the government money due to your mistakes, you will have to pay penalties and interest.

If you overpay they'll credit you next year. They're pretty lenient as long as your act promptly in good faith

Re: FTC sues Intuit for its deceptive TurboTax “free” filing campaign

#477

Post by jacobolus »

JSavageOne wrote: post #386
mikeInAlaska wrote: post #381

Earlier quoted context omitted.

> Why is the system still this backwards? Intuit lobbying hard to keep tax rules complex.

Blaming "lobbyists" absolves the politicians of their responsibility. The fault lies with the politicians for creating and perpetuating this broken system. (copy and pasted from another comment)

Like anyone else, politicians respond to incentives. US crony capitalism is a large-scale systemic failure, and the tax filing system (and under-resourced IRS) is just one symptom.

If you want a narrow target, you can blame the GOP activists on the US Supreme Court, or if you want to go beyond that, blame the GOP senators/presidents who appointed them, the Federalist Society, the GOP donor base, GOP-aligned media organizations, etc.

Gutting campaign finance restrictions was a vast judicial overreach, performed for partisan advantage and the benefit of corrupt wealthy patrons.

Re: FTC sues Intuit for its deceptive TurboTax “free” filing campaign

#478

Post by toast0 »

belval wrote: post #13

I know that ship has sailed, but I really wish politicians would go back to making promises that have an impact on everyone like abolishing tax fillings. It might be different in the US, but in Canada I file my taxes using the CRA's data directly. TurboTax even fetches it directly from their website. What's the point? They have my T4, my T2202 (studies) and everything else. Just send me a letter telling me how much m…

> I know that ship has sailed, but I really wish politicians would go back to making promises that have an impact on everyone like abolishing tax fillings.

I'm not a fan of Trump, but the Trump tax changes made it so it doesn't make sense for me to do itemized deductions, because I won't beat the standard deduction unless I have a lot more things to deduct than I normally do, which greatly simplifies my tax filing and record keeping. Since I know I won't be deducting donations, I don't need a receipt when donating them, and that saves paperwork.

Re: FTC sues Intuit for its deceptive TurboTax “free” filing campaign

#479

Post by dguest »

legalcorrection wrote: post #466
dguest wrote: post #453

Earlier quoted context omitted.

I know people who have optimized this: - they fill out their taxes with rough estimates, - the IRS helpfully corrects their errors, and sends the form back - they sign the corrected form, send it back - the IRS accepts the second round. This is basically the same "pre-filled" workflow as every other developed country. The difference is that we have a first round where you put in a semi-plausible effort to placate the…

Beware: if you owe the government money due to your mistakes, you will have to pay penalties and interest.

How much are the penalties?

If they are charging some absurd (say 20%) interest and you're off by 10k, you might pay them a few hundred in interest if the process is prolonged a month, which is on par with a tax prep service.

Re: FTC sues Intuit for its deceptive TurboTax “free” filing campaign

#480

Post by toast0 »

zerocrates wrote: post #425
deathanatos wrote: post #243

Earlier quoted context omitted.

I think the objection is not that they're charging a fee, it's that the fee is $39. TurboTax (just the basic federal edition) is what, $30? And yes, this is essentially credit, extended for what, a month? So ($39/$30 * 12) is yearly rate of like 1,560% for that credit, aka., highway robbery — that, I think, is the parent's point. (I might be a bit off on the price, but not enough to change the result. TurboTax's loss…

Plus they themselves have calculated that you're due a refund that will cover that cost already at this point, and they're going to directly pull their fees out of it... while not 100%, it's got to be pretty near the bottom in terms of risk. Especially if they still wait to pay you the balance until the refund is actually paid by the Treasury.

There's a few risks they're taking still.

a) that you have an outstanding tax bill, or other garnishment, and while you overpaid, you will not be receiving a refund, and they'll need to find you to make payment some other way.

b) the return is fraudulent and they're going to have to pick up the pieces when the IRS figures it out and reverses the deposit. Plus, they didn't get paid.

Is that $40 of risk? Eh, probably not, but it's something.

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