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Tax prep services forced to reveal the free filing software that already existed
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Don’t tell me that good journalism doesn’t matter. Thanks to an exhaustive investigation from ProPublica, tax filing companies like TurboTax (Intuit) and H&R Block now have to allow the free tax filing software to be found through Google (or any other search engine) search. Previously, these companies had code that hid the free software from search.
When you file taxes every year, you either fill out the forms yourself after downloading from the IRS website, you hire an accountant or you use a tax filing service that you thought was free but then are met with a service fee at some point in the middle of filling out the forms online. You either eat and accept the fee, or you get frustrated, give up and dodge the IRS for years like Wesley Snipes.
Tax filing should be free, as it is if you fill out the forms yourself. The thing is, doing your taxes is not always easy. While the IRS can’t help with that, thanks to an addendum to the Free File agreement (made between the IRS and the ten companies in the Free File Alliance), it should now be easier to find free tax filing services from the companies that promised free tax filing but hid it from public view.
Of course, while it spent years fighting such an addendum, Intuit is totally into it now. The companies involved must also standardize the naming convention of the free tax filing software. The addendum also opens the door for the IRS to make its own free filing software.
There are a couple key points here when discussing this free tax filing software
If you’ve used something like TurboTax in the past, you might have noticed that it does have a free option. I know that I’ve seen it as a selection when filing my taxes annually. The thing is, this is the most basic option available (your 1040-EZ for example) so a lot of people will still be paying for tax filing services.
For instance, since a lot of my work is W9 (1099), I have no problem choking out the $100 or so so I can get access to the advanced forms that include deduction calculators and so on.
Sure, I could download the forms from the IRS and do it myself, but the price that TurboTax charges to make all this easier with a bunch of questions and selection tools is totally worth it. I can’t use the free option anyway and the IRS forms confuse the shit out of me. I’m paying for a service and so be it.
For many tax-paying citizens though, the free option is all they need, now it’ll be easier to find. TurboTax and its ilk will still try to market people into paying, but that’s on the consumer to tell the difference.
The second point is that any software created by the IRS will likely never compete with a third-party vendor. Have you tried to navigate the IRS lately? It finally added the options to manage payment accounts online last year. Paying electronically is a pain in the ass with its system.
Believing that a government agency can create a competent tax software system is beyond naive. Not only will it take years and millions of taxpayer dollars, but it will likely be clunky and unwieldy for those of us not filing the most simple of tax forms.
Regardless, hiding the free tax filing services was some high-level shady bullshit. These companies have to have free services in order to play in the sandbox with the IRS. Now those services are out in the open, searchable and will likely serve up more marketing and up-sell opportunities for tax filing companies. So, there’s that.
What do you think? Surprised that these companies were essentially hiding the free tax software options? Let us know down below in the comments or carry the discussion over to our Twitter or Facebook.
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