Ask HN: How does TurboTax get away with dark patterns? | Hacker News Reader

Ask HN: How does TurboTax get away with dark patterns?

168 pointscebert122 comments

Intuit, the owner of TurboTax is one of the largest players in tax e-filing. How do they seem to employ so many dark patterns with little complaint from consumers? TurboTax employs user hostile UI patterns that attempt to get consent to release filing information to Intuit and 3rd parties, switch to more expensive plans, and open new Credit Karma accounts (another Intuit owned property). I don’t understand why consumers are not more frustrated.

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So many people offering explanations, and yet not a single one of them answers the OP's question. If you're upset that Intuit is engaging in lobbying (as you should be!), that might be an appropriate answer for a different question (eg: why doesn't the IRS just send us their own reports for us to approve?). Again, I am not defending Intuit's involvement in politics, but that's not the answer to the dark patterns question - let me try to answer that specific question:

For years, I kept experimenting with different approaches to filing my taxes. I started out with TurboTax, and being so painfully aware of their bad reputation, I kept trying out every alternative I could think of - including their biggest competitor TaxAct and three different tax firms. After all that work, I am back to using TurboTax. Obviously, it was not an easy decision given how hard I tried to avoid that path, and no, I didn't return to TurboTax because I got tricked by one of their dark patterns.

The simple answer for why the tax firms didn't work out is that the work they required in their onboarding equaled or exceeded the amount of work it would have taken me to do the whole thing in TurboTax myself. Mind you, this is just the onboarding piece - not including the emails and calls leading up to the onboarding and following the onboarding.

The least sophisticated firm just said: send us everything in a zip file. That sounded appealing until they started following up with a million questions. The medium-sophisticated firm (which was the most painful of all of them) asked me to use their web app which was essentially TurboTax except that the questions were incredibly confusing so that I had to look up a ton of stuff just to make sure I was submitting the right thing. The third firm used a better web app, but it was still the same thing - the onboarding was essentially the same as just using TurboTax.

The obvious added value with tax firms is that they might catch something that you would have done wrong without their assistance, but these days TurboTax does offer the same service as well (and no, I never received some valuable piece of advice that justified the additional time and effort of working with a tax firm).

TaxAct is not bad, and would be my close second preference. In fact, they actually cover more niche cases (eg: filing certain types of corporate taxes). Even so, their UI/UX is only almost as good as TurboTax but not quite. As unpopular as TurboTax might be in this community, I think we can take a moment and appreciate their PM+UI/UX team, who used some pretty delightful copy and super slick design to turn an awful task into a rather pleasant experience.

And that's the ultimate answer to the OP's question as I see it... most people who are aware of the dark patterns in TurboTax know that it is not the cheapest way to file, but it's certainly not the most expensive either - and if you're looking for the easiest-to-use and fastest method to get the tax report checked off your list, then it's hard to find a better solution (granted, partially because they are helping create the world we live in).

"why doesn't the IRS just send us their own reports for us to approve?"

I assume because nobody would file taxes for things that the IRS was absent from their report, because now you know the IRS doesn't know about it and won't be missing it.

I think TurboTax has too many partnerships and offers. It gets people because it's free or only $10 or whatever. It would be pretty easy to switch to other software, like HR Block.

> I assume because nobody would file taxes for things that the IRS was absent from their report, because now you know the IRS doesn't know about it and won't be missing it.

That's not why.

The IRS is underfunded and overworked, so even if it had the information it needed to generate a report for everyone, it still couldn't do it. But it doesn't have that information anyway!

A lot of taxable income is derived from sources that are not reported to the IRS before taxes are filed. This includes things like cost basis for RSUs, state and local taxes (including property tax), and various kinds of investment income. Until 2008, brokers were not even required to report cost basis information to the IRS, which enabled people to easily lie about the amount of their taxable gains!

On top of that, there are a lot of deductions that are based on information the IRS does not have, such as business expenses, moving expenses, etc.

The IRS still largely relies on self-reporting by taxpayers. Anyone with a moderately complex tax situation (e.g. a homeowner, or someone with investment income) knows more about their tax situation than the IRS does!

> This includes things like cost basis for RSUs, state and local taxes (including property tax), and various kinds of investment income.

Assuming the political will to make tax prep easy (which I know does not exist), the fix for this would be pretty simple for Congress to legislate. Sure, it would likely take a few years for all municipalities to come into compliance, but it's not like this would be difficult.

> On top of that, there are a lot of deductions that are based on information the IRS does not have, such as business expenses, moving expenses, etc. [..] The IRS still largely relies on self-reporting by taxpayers.

Sure, but there's no reason why the IRS couldn't have a website where everything it does know is pre-filled, and then could ask you about things they don't know about (and even hint at the kind of things that they wouldn't know).

> Anyone with a moderately complex tax situation (e.g. a homeowner, or someone with investment income) knows more about their tax situation than the IRS does!

Not really? My tax situation is probably "moderately complex": for 2021 I have W-2 income, contractor (1099-NEC) income, interest income, dividend income, capital gains through sales of stock, mutual funds, and bonds, RSU vesting, ESPP purchases and sales, required distributions from an inherited IRA, mortgage interest payments, charitable donations, and state, property, and estimated tax payments. I even have AMT credits I've been carrying forward and using for several years now. There is no reason, in principle, why the IRS could not be unambiguously and correctly notified of all of these things and prepare a return for me.

I hear a lot of "the IRS doesn't know X because Y isn't required to report X"... well... fix that! And I totally agree that the IRS won't know everything sometimes, especially sometimes things that would help lower someone's tax bill (like, say, deductions for business expenses). But there's nothing wrong with that; taxpayers can simply report those extra things during tax season, after doing a quick check to verify that everything the IRS does know is correct. Most other developed nations in the world have no problem with all this; the only thing that's "unique" about the US is our dysfunction.

To a paraphrased an old saying, “it’s hard to get a politician to pass laws to make something easier when he gets paid to make it harder.”

https://www.propublica.org/article/inside-turbotax-20-year-f...

"the IRS doesn't know X because Y isn't required to report X".

They are required to report it. Only the current reporting is that an individual is being sent numerous pieces of mail. It could instead be that the IRS gets these (systematically) and sends a person the compiled tax form for validation.

> Sure, but there's no reason why the IRS couldn't have a website where everything it does know is pre-filled, and then could ask you about things they don't know about (and even hint at the kind of things that they wouldn't know).

Just the way it works in saner countries like France. Things the tax authority knows are pre-filled, and I'm asked about the rest. So yes, there's no reason besides the fact that many companies would lose their business ( like TurboTax), so they lobby against it.

What about the fact that such a thing would certainly start to eat into Intuit's profits?

You're right--there's no technical reason this couldn't be done. And it should be done. But too much money is greasing too many palms.

As to the OP's question, I don't know why more people aren't steaming mad about it. We're getting taken to the cleaners.

Because the tax firms lobbied to bar the IRS from doing so. Other countries I've lived in make the common case this easy.

For many if not dare I say most TurboTax is among the cheapest because it is free. The fact is if your situation is simple (a W-2 and the standard deduction) then you can get away with just about anything.

The truth is the IRS doesn't send reports because this country is obsessed with deductions. Your income (which the IRS does know about) is a small factor in the entire equation.

Ironically, under Trump's tax cuts, the standard deduction was made a lot larger (while removing the availability of some deductions). This pissed off the people who loved those deductions, but in the end it made the standard deduction applicable to a lot more people.

If you aren't taking deductions, then you can just use any of the services for free and don't really need to worry about dark patterns.

> TurboTax is among the cheapest because it is free

Free? Haha in what world?

It's free if your taxes are covered by:

* W-2 income * Limited interest and dividend income reported on a 1099-INT or 1099-DIV * Claiming the standard deduction * Earned Income Tax Credit (EIC) * Child tax credits * Student Loan Interest deduction

basically if you don't sell any assets, have employee stock compensation, or donate a ton of money you can file for free.

Also if you aren't filing your state taxes.

Pretty much everyone has to pay if you use turbo-tax, the "free" edition is not an IRS free file offering they don't advertise that one. There are very very very limited cases to not be hit by a "surprise" you need to upgrade and pay us from with money from your tax return. A staggering percentage of people who would have eligible to file for free under the IRS program end up paying because of the dark patterns, and the misleading marketing you for whatever reason are perpetuating.

2 years ago 37 Million people filed online who were eligible to use an IRS free file offering and only 6.8% did... [1]

[1] https://www.youtube.com/watch?v=7xQQkzWhMOc&ab_channel=Netfl...

[2] https://www.propublica.org/article/turbotax-just-tricked-you...

If you sold a single stock throughout the year you are excluded from all the free tax filing software I’ve seen. A bunch of my income is in RSUs. For us I need a VM to run TurboTax

I have filed with all sorts of wild overcomplicated ISO/ESPP/RSU/NSO/etc employee stock compensation and never had to use anything other than the webapp. Why do you need to run the desktop application at all?

I used FreeTaxUSA with a Wealthfront account that had stock trading. Wasn’t charged.

FreeTaxUSA is strangely under-mentioned on these threads. I’ve used it the last couple years with a complex-ish situation. Not a single complaint.

I tried it last year and really liked it.

I initially tried it because CreditKarma had egregious errors last time, like:

1) Inverting my answer to “have you sold cryptocurrency” on the forms.

2) Silently removing decimal points (changing 8.005 to 8005 shares in the forms)

3) Persisting an entry for income after I tried to delete it and re-enter, with no way to fix it even after talking to support.

4) Having forms with an overlay “do not use”.

FreeTaxUSA still refused decimal points in the forms (like in item 2) but at least warned me so I could work around it.

didn’t know about it until i browsed /r/tax

I’ve done my taxes with FreeTaxUSA for a few years as well. The webapp is simple, with no swooshing animations - but it gets the job done for 1/4 the price of TurboTax these days.

A few years ago I benchmarked the two together and they basically gave the same answers. They also don’t hold your past returns hostage.

I’ve been recommending them to everyone that I talk to about taxes.

For me no animations (except a real loading circle) is a plus point. I don't want to spend time looking at a fake circus display of taxes. Its form filling, I just want to fill data and be done with it.

> A bunch of my income is in RSUs. For us I need a VM to run TurboTax

No you don't. I've sold stock more years than not and I've never needed to do that.

I remember there was a huge issue among the teachers unions that teachers wouldn't be able to deduct up to 500 dollars anymore for classroom expenses (I may have the number wrong). I was thinking, you teachers should be good at math and realize your deduction being doubled is way nicer than having that classroom supplies deduction. Also, why isn't the school paying for your expenses (but that's a whole separate conversation)

You are thinking about this wrong. When you are in a situation where you take the standard dedication then you suddenly lose the benefit of doing any tax-deductible actions. So teachers across the board were immediately disincentivized from buying school supplies because it’s effectively not tax deductible anymore.

I rant about this all the time with charitable donations. Any behavior the government wants to incentivize through tax policy — charitable donations, student loan interest, IRA contributions should be credits that apply in addition to the standard deduction because otherwise there’s no incentive for most people.

Are you really suddenly not going to spend $500 on your students because now only $450 of it goes towards goods instead of the full $500? That doesn't really make any sense to me. Especially if the standard deduction grants you an additional $1k that you wouldn't have gotten otherwise.

By that reasoning there was never even a point to having the deduction in the first place.

If you believe incentives are the only point of deductions, then sure. I believe part of the reason for deductions is to provide some relief to people who are spending for their work or for the state. In any case, I'll take favorable taxes however I can get them, even if it means I no longer benefit more from itemized deductions over the standard deduction. Especially since the standard deduction is much easier.

I wonder how many teachers ever benefited enough from itemized deductions to take it?

Honestly though, we also need to ask why teachers are having to spend money out of pocket at all. We pay all these taxes, shouldn't the schools be able to afford photo copies?

I think you're right on how the policy works, but look at the math. The standard deduction doubled, so as an equation New_deduction > old_deduction+school supplies

Teachers came out ahead

And they come out even more ahead if they stop buying classroom supplies.

no argument there. Would you agree with me that it'd be better if the schools provided all the materials that a teacher needs, instead of them paying out of pocket for supplies? I'll sometimes pay out of pocket for work supplies but I just get reimbursed so it's no big deal.

I would if the source of the funds remained at the federal level.

I don't think that really is what OP is asking. The simple answer is that people are very fearful and confused over finances and Intuit offers tools to manage it. And they likely found very high conversion rates by offering these services midway through a very stressful process. Having a company with a strong public reputation offer services to protect your finances is likely very appealing.

I think it's also unfair to say the only standing between us and free file is lobbying. Lobbying doesn't set policy. Congress can still do whatever they want. And it's not like Intuit is keeping free file secret. The IRS hasn't built it. Doing so would cost money, create new bureaucracy and likely face a distrustful public who would rather pay a company then trust the IRS.

You might want to try freetaxusa. I tried them last year and really like them.

I used freetaxusa last year after using turbotax previously. I found that the experience of using turbotax was more like giving my information to an accountant and having them prepare the forms, while freetaxusa was more like sitting there with an accountant explaining what each box means, while you fill out the forms yourself.

I'd say the turbotax approach was easier to fill out, but freetaxusa was much easier to look up additional information when the guidance fell short; when I wasn't sure how to fill out turbotax's questions, figuring out which box it applied to so I could look up more information was supremely frustrating.

Specifically, I was freelancing the previous two years, and I was looking up information about itemized deductions.

I used TaxAct for many years and had no real issues with it. A few years ago I started having a CPA do my taxes because my tax situation got a bit more complicated, and I didn't trust myself to even answer TaxAct's (or TurboTax's) questions correctly.

> The least sophisticated firm just said: send us everything in a zip file. That sounded appealing until they started following up with a million questions.

That's super weird. Every year I answer a 2-page questionnaire (about 30 yes/no questions), sign an engagement letter and some authorization docs, scan those, zip up all my tax documents, and send them over. My CPA rarely needs to ask any questions of me at all, and sends me my completed return for approval in early April. It's not cheap ($1700), but the peace of mind plus the lack of need for me to do much of anything, is very much worth it. I'm fairly certain I'm saving money overall, but even if my tax bill ended up being exactly the same were I to do it myself, I'd still pay to have it done for me, with a much higher expectation of correctness.

I've used FreeTaxUSA and it's done everything I've ever wanted.

They are frustrated, they're simply not aware that Intuit and other players have exercised regulatory capture to make it so awful and blame "the government" since the IRS is the face of it.

Other modernized nations have nothing like this insanity, often sending people yearly reports they can accept (since for most cases they are accurate) or send in amendments. This is far from the only issue that business interests have made the USA almost uniquely fucking stupid about.

That’s my frustration. Tax filing should be a free service of the IRS for everyone. The process could be much better too. The IRS already has my W2s, 1099s, etc. There’s no reason I need to resupply what they already know.

There is a reason - lobbying: https://www.propublica.org/article/inside-turbotax-20-year-f...

sending people yearly reports they can accept (since for most cases they are accurate) or send in amendments.

This would be perfect. It doesn't make any sense that my employer, banks, etc has to send everything in, but then I do to.

I wish someone would set up a class action lawsuit against the IRS on behalf of everyone with ADHD, claiming that forcing everyone to do tedious paperwork is a violation of the ADA.

The government here (Spain) knows the money I make just as any government knows about its citizens.

When I'm to do my taxes, I get an auto generated draft and the only thing I have to do is click the "Accept" button.

You only have to fill your taxes manually if you're self employed or have some sort of earnings other than your job, in which case, the company that does you accounting, does the taxes for you too in 15 min.

> The government here (Spain) knows the money I make just as any government knows about its citizens.

The problem the IRS is trying to solve is collecting taxes on money they don't know about. For example, if you sell illegal drugs, you should be paying tax on that income. But obviously you don't report to the government the amount of illegal drugs you sell. So they can't just send you a bill for your taxes.

It is odd that every American has to suffer for this obscure corner case, but they probably lose a lot of revenue if they stop taxing drug dealers, so here we are.

Drug dealers aren't stupid enough to be reporting their incomes to the IRS, they're just getting an extra criminal charge when they get caught.

It's not the IRS caring about losing revenue, but lobbying from tax firms that's the problem.

There's a corner-case to this corner case which is marijuana sales. Legal state vendors are technically violating federal law but the IRS still expects a cut from them, and the ones wanting to stay in good standing are certainly reporting.

And, staying in context to the discussion, the IRS already knows about all of that from these companies' public state level filings.

Are they really trying to solve the problem of unreported income? Does it really solve that problem? We could look at that data from the IRS with a little study, and compare it to the productivity costs of millions of Americans compiling tax returns.

The main problem tax returns are trying to solve is that Americans aren’t enraged enough at their taxes to demand lower taxes (on the rich) or a much simpler (and regressive) flat tax. I posit that there is no technical or financial incentive at all, and that the aim of the tax filing regulations is entirely political.

I'm pretty confident I'm correctly picking up on sarcasm here.

But if I understand correctly, that corner case isn't even "real". Suppose you were a drug dealer in a country that automatically handles tax, and most citizens don't need to file a return, e.g. the UK. I'm pretty confident you can still be prosecuted for failure to report the income from your drug dealing, just as you could be for not reporting any other income where the tax wasn't removed from the paycheck.

Cash tipping can also fall into this, and is hardly an obscure corner case.

In the USA the government also knows the money you make. They have all the data they need to be able to generate a pre-filled draft, and taxpayers could use that as a starting point and modify it if they needed to take a large tax credit for installing solar panels, or some other such thing which the government doesn't necessarily know about.

But it's against the law. The law specifically prohibits the tax agency (IRS) from providing pre-filled tax forms for taxpayers. Why? Who knows... I can't read the minds of Senate and House members! But I'd very confidently place a bet that it's entirely because of careful lobbying by the two companies (Intuit and H&R Block) who make large amounts of money off the current system.

References:

https://www.vox.com/policy-and-politics/22596072/irs-turbota...

https://www.propublica.org/article/turbotax-just-tricked-you...

That was my point.

They know the money you make, they can make it free and easy but they don't want to cut the middleman.

Even were this not the case—short of an arrest, there is no way for the federal government to “serve you” in a contactable manner—whereas my sense is that this is not the case in Estonia and a growing number of spam nations, ie the government can mandate that citizens be reachable digitally (e.g. portal login is sufficient). The IRS has no inexpensive and scalable way of proving that the person on my end of the Internet is the person with the SSN in the filling (login.gov is great but not pushed throughout all the service branches).

I think the bigger issue is the complexity of personal taxes in the US. The technology is a solved problem. Australia has had a government provided free tax client since 1998 with pre-fill facilities, which was retired & moved to a web portal in 2016.

You have entrenched interests keeping the whole process as difficult as possible.

I have to disagree here. It's not about the middleman. They probably know the income you made -- but they may also not know all the income you made. Self reporting of taxes is standard in many countries for this reason. People run small businesses, freelance, get cash payments, tips, etc that are outside their normal (reported) income. You are required to report this, even if the IRS doesn't know about it. That's why they will never send you pre-filled forms. They want you to report everything -- and they're certainly not going to make easier to skip reporting some of your income.

> Self reporting of taxes is standard in many countries for this reason.

A person up the comment chain in Spain said that's not the case there, and i can confirm the same for France - everything they know is pre-filled, and it's up to you to declare the rest. Of course some people will underreport, but so will those willing to in the American system ( for tips, cash payments, freelancing they can be fairly certain the IRS can't know). Nothing changes besides middlemen lining their pockets and regular people losing time.

> Intuit and other players

I hate to defend Intuit, but this is backwards. It is more accurately "Other players and Intuit" where "Other players" means the Republican Party. Thanks to efforts by Grover Norquist, the GOP is fundamentally opposed to making it easier for the IRS to collect taxes.

Intuit's lobbying efforts are practically meaningless in comparison.

I think you're trying to draw a distinction where there isn't one. Who do you think lobbyists lobby?

The Democrats are also opposed to simplifying the tax system. Some of this is lobbying; some of this is the philosophical approach the third wayers running the party have to fixing .gov with more rules rather than less.

I prefer an incompetent yet inconvenient government. Most of Europe also had a very effect "green passport" scheme where all medical information was logged and tracked whereas in the states such efforts have been a lot more difficult to enforce.

> Most of Europe also had a very effect "green passport" scheme where all medical information was logged and tracked

Nope. A "green pass" is a QR code saying FirstName LastName (born on X, only available for border crossings) has had 3 doses of Pfizer, last one on date Y OR has had a negative PCR on date Y. The apps used to read and validate those QR codes don't track anything and there's no other medical or personal information.

Why would I be mad at Intuit? They’re an amoral profit-seeking company seeking profit. I’m furious at the IRS and Congress for not providing me with a free, simple federal tax filing solution. I know there are free file programs for certain income brackets or tax situations, but it’s outrageous that the IRS has colluded with Intuit (and other paid tax preparers) by strongly recommending that taxpayers file electronically but then not provide a free solution across the board.

^ This. It's so obnoxious that the _only way_ to e-file is to go through one of these companies, unless your income falls below a certain (not-very-generous) threshold.

First, you can still e-file for free. You just don't get any guidance on filling out the forms.

Second, the reason it's this way...is because of the excessive lobbying to keep it this way, of which Intuit is one of the largest players. In fact, there is no reason for the IRS not to just tell you "here is what we think you owe/should be refunded", and for you to say "Nope, here's why (and e-file relevant forms)", or "Yep, that's correct", except that lobbying has prevented it (well, and the last time it came up one of the two political parties was against it ostensibly because 'big government')

> First, you can still e-file for free.

Only for certain definitions of "you". All the available offers have various restrictions.

AFAIK there are no restrictions on who can use the IRS's Free Fillable Forms, though there are a few fairly obscure forms it doesn't support.

https://www.irs.gov/e-file-providers/free-file-fillable-form...

That’s correct. The filling is free for everyone. The tax preparation is not.

The IRS didn't collude, congress did. They're the ones who cutting their budget, year after year.

>Intuit revved its new lobbying machine. Even before the OMB report was publicly released, a group of Republican lawmakers, led by TurboTax’s hometown congressman, wrote to the agency arguing that there was no reason for the government to “compete” with the “well-established” private tax prep companies. Intuit’s lobbyists also went above the OMB and pressed their case directly to the White House, Forman recalled.

>At the IRS, “all hell broke loose,” remembered Terry Lutes, who was then the head of electronic filing at the agency. Intuit’s clout on the Hill meant that lawmakers were soon accusing the IRS of making “secret plans to undercut the industry,” Lutes said. The agency ran the risk of seeing its funding cut if it were to pursue the Bush plan.

>The IRS commissioner at the time, Charles Rossotti, also opposed the idea. The IRS’ customer service staff, already too thin to respond adequately to Americans’ questions about the tax code, would have to grow substantially to handle millions of software queries. Congress “will never give you sufficient funding,” Rossotti told ProPublica.

https://www.propublica.org/article/inside-turbotax-20-year-f...

Why would I be mad at the guy who stabbed me? He is simply a collection of atoms following fatalistic processes. I'm furious at the knife and knife makers for not providing me with a stab-wound-free epidermis.

Funny I just came up with almost the exact same analogy above and then saw your post.

They encourage filing electronically now? That's news to me. I filed my taxes electronically two years ago and they apparently printed it out and then lost the paperwork, then accused me me of failing to file taxes a year later. This year I found out they lost it again.

I just don't understand why they're encouraging e-filing when they can't keep track of them properly.

This is like if you were getting violently mugged and you stopped in the middle and said "why would I be mad at the muggers, they are just optimizing their own finances".

You can expect people to do what is in their own interest without supporting them. I expect that the muggers will mug me. I don't support them in mugging me.

They are an amoral profit seeking company who is screwing you and I over so they can benefit. That doesn't mean it should automatically be illegal, but it's not clear to me why you would like this.

I read the comment as agreeing with you more than it disagreed. Gp is rightfully mad at Congress and IRS because ,regardless of Intuit's own interests, levying federal taxes is solely a power of Congress. If neither Congress nor the IRS are making tax filing simpler, then either there's some hidden agenda or they're just plain incompetent. They're not victims of anything other than themselves.

I'm not sure your outrage at the IRS is well-placed. The Taxpayer First Act prevents the IRS from developing a competing tax-filing service: https://www.propublica.org/article/congress-is-about-to-ban-...

I recently had Intuit delete all my personal data, across all their products. Doing this was exhausting. Their online process for deleting an account did not work. Contacting customer support resulted in unhelpful back and forth. Finally, I gave up and filed a complaint with the CA Attorney General. Within two weeks, I got a call from someone at Intuit who quickly resolved the issue and promised to delete all my Intuit-owned accounts (it seems to have worked).

I tell the story because I think it illustrates a lot of reasons companies can get away with bad behavior:

1. Only a subset of consumers recognize the bad behavior and know who to contact.

2. Most consumers are not motivated to complain. In the above story, most people would probably stop when the Intuit website doesn't work (I usually give up too). There is a free-rider problem. My complaint could benefit lots of people if a company changes its behavior, but I alone incur the cost of complaining.

3. When a consumer successfully complains, companies can sometimes quietly make the problem go away for the one consumer and avoid regulatory action. Intuit called me, resolved the issue only for me, and we both move on. With the issue resolved, the regulator has less reason to continue investigating.

4. Even when regulators get enough complaints and go after bad behavior, they are up against powerful attorneys and lobbyists. And even if the regulators win, the company probably has lots of substitute ways of achieving the same goals that weren't contemplated or prohibited by the settlement/law/etc.

I can confirm that the online process for deleting an account still does not work! Gets into an endless loop sending repeated validation emails. (Firefox with all blockers disabled.)

You would think there would be more political will for a government to make taxation as smooth and painless as possible for its citizens. I don't hate paying income tax because I "lose" money, I hate it because the process is a massive pain in the ass, and if I make a mistake (how can you not), I risk being fined, or worse.

Turbo Tax also provides some kind of service to help you if the IRS comes after you for some errors. One of my friends paid extra for this, him made a simple calculation error in their tax return, the IRS came after him for it, and Turbo Tax didn't do shit because he made the error, not Turbo Tax. So they're giving you the opportunity to pay them extra to cover the cost of their mistakes.

I honestly think more people would be willing to pay higher taxes if the process was low-effort for most people. For example, if you work for a company that witholds taxes from your paycheck, you shouldn't have to do anything; either you get a check in the mail if you over-payed, or a bill if you under-payed, and you answer a yes/no question to adjust your W-4 for the next year.

> I honestly think more people would be willing to pay higher taxes if the process was low-effort for most people.

TBH I think this is why Intuit has been so successful in their lobbying efforts. A key goal of many politicians is to create tax breaks for the rich, and by making taxes as complicated as possible, they can trick the populace into agreeing to just about anything that would "simplify" the tax code.

That makes a lot of sense. And it is not just about simplifying, it is also the general disdain against taxes that facilitates tax breaks for the rich.

Under most conditions, the IRS just wants its money. If you make a mistake on your return, they will notify you by mail and give you a number to call to get things cleared up. If you don't call the number within the allotted time period, and don't pay what you owe in a timely fashion, THEN they start hitting you with penalties.

There are plenty of failure modes to this process that could potentially get bad, but in general the IRS wants to give you a chance to settle honest mistakes amicably, and only really "go after" you with tax evasion charges if you persistently avoid filing and paying. They're tax collectors, not cartoon villains.

Sauce: Made a mistake on my taxes once, got contacted by the IRS, followed the procedures to correct it.

>How

They have lobbyists [0][1], and you don't. But don't worry, "experts" and oligarchs tell us that corruption here is among the lowest in the World.

>Using lobbying, the revolving door and “dark pattern” customer tricks, Intuit fended off the government’s attempts to make tax filing free and easy, and created its multi-billion-dollar franchise.

[0] https://www.propublica.org/article/inside-turbotax-20-year-f...

>The biggest obstacle, the New America experts warn, is the lobbying power of Intuit and its allies.

[1] https://www.latimes.com/politics/story/2021-10-21/california...

The final straw for me was in 2019. My 3 year old version of QuickBooks Pro refused to import any more bank transactions until I upgraded to a newer version. Nothing had changed with data formats or anything -- it was simple extortion: upgrade or the software you own will cease working (fully).

Fuck them. I just wrote my own. I first tried some alternatives like GNUcash, but found it best to just write what I needed (account ledgers, reconcile bank statements, generate P&L and BS reports). I refused any other solution with any dependencies on "the cloud" or any entity.

QB is truly about the shittiest software on the planet, a reputation maintained and expanded over the decades. The simplest recourse, with minimal emotional toll, is to just not use their crap.

I was in the same boat. QB refused to import for a year or two, and then after than completely ceased working unless I upgraded. I stopped using it. I didn't like GNUCash. I found a small indie commercial piece of software which was more like the old Quicken than Quickbooks, but it was good enough for my purposes.

But I've been worried if that indie is going to survive financially. Any tips on writing your own?

I wanted to like GNUCash, but I just didn't. I had the same concerns re: other apps. I used the situation as a reason to play with developing a standalone app using Go, with sqlite3 as the database (basically a localhost web app). It was actually a fun side project, with the satisfaction of being free from Intuit. With it being go and embedded sqlite3, there are basically no dependencies to worry about.

Actually the worst dark pattern is implemented by the IRS. No doubt lobbying keeps it this way.

The process for online filing with the IRS is a hot mess, and extremely difficult to navigate. For example, it is impossible for me to file 1099-NEC for my contractors without first obtaining a special ID delivered via mail in 45 days. I can't print and mail from the IRS website either -- I have to first request the form. Check out this cryptic mess

https://fire.irs.gov/

Isn't that because the creators of TubroTax had a lawsuit against the government because the IRS modernising their software-based filing would cut into their commercial efforts?

Ah yes:

https://www.reuters.com/article/legal-us-otc-intuit-idUSKBN2...

https://www.npr.org/2019/05/07/720941665/la-city-attorney-su...

It was a bit of a different construction, but the premise of "we want to make money and prevent a government service from being accessible using software made by the government".

I'm working with some other contributors on ustaxes, an open source project aimed at helping tackle free tax filing https://github.com/ustaxes/UsTaxes

A client of mine sent me a 1099 last month through their QuickBooks account. I never used any of Intuit's products before.

In order to download it I (the recipient of the 1099 which is nothing but a PDF file) had to create a QuickBooks account.

During this process:

1. I was denied being able to make an account unless I used a password less than 33 characters (my normal passwords are well above that but it was blocked). Here's a tweet and screenshot of the form validation https://twitter.com/nickjanetakis/status/1486793382789885960.

2. Their page tried to get me to sign up to their paid services multiple times while attempting to download the 1099.

3. Their page tried to get me to upgrade my account to a paid account after I downloaded the 1099.

4. In order to close my account I had to call an 800 number and speak to a human. I ended up not doing this, but someone else in another comment said they tried unsuccessfully and ultimately filed a complaint against them through their state's Attorney General.

Pretty much every dark pattern you can ask for tied into an activity where incorrectly paying your taxes can lead to fines or imprisonment.

Intuit forever lost my business when they tried to run my QuickBooks Payroll from a bank account I deactivated, after moving to a new bank (and updating my bank information in QuickBooks). They then charged me a $100 non-sufficient funds fee because they tried to pull the money from the deactivated account.

After 6-7 hours of dealing with the most aggressively-incompetent "support" I've ever had the misfortune to encounter, I cancelled every Intuit product/service I was using.

The reason they get away with this type of behavior is because we're all trained to fear the IRS to such a degree that we just want someone else who promises to "take care of everything" for us. And what recourse do we have when they behave badly? The court system? That's just as obfuscated and frustrating as the IRS. How much more of my time and money am I willing to put into dealing with Inuit? By the numbers, the smartest move is to just let this go.

It's everyone just settling for the lesser of evils/frustrations - until they get burnt badly enough.

The entire us tax system is a legislative dark pattern that funnels people into accounting outfits like TurboTax.

I use TurboTax.

The reason I use it is that I've used it in the past and I know it works for my somewhat weird tax situation. It sucks. Intuit is a terrible company. But there is no way to know that I'll be able to actually navigate the wizard for some other product before I dive in. And all of the free options definitely don't support my situation. If I wanted free I'd be stuck with the raw forms and I'm not confident I'd do it all right.

I'm a weirdo and I actually like the precision of doing taxes, but the consequences of botching it are very high. So I go with the thing I'm familiar with and I get mad that TurboTax is taking $110 of my dollars every year for crap that should be done much more simply.

There are a couple of open source projects like http://opentaxsolver.sourceforge.net/ and https://ustaxes.org/ ; perhaps we should support these to get to the point where they can actually replace TurboTax and H&R.

I bet the laws are unnecessarily complicated and they probably continue to get more complicated due to Intuit's lobbying but opposing that is a much more expensive proposition than supporting an open source project (with code, or financially).

Here's a Pocket article explaining it: https://getpocket.com/explore/item/the-irs-already-has-all-y...

> Consequently, of the more than 100 million taxpayers eligible for free help, 35% end up paying for tax preparation and 60% never even visit the free websites. Instead of 70% of Americans receiving free tax preparation, commercial companies whittled that percentage down to 3%.

BTW the US Treasury has been trying to get corporations to comply for years (since 2009). Here's a link to their report: https://www.treasury.gov/tigta/auditreports/2020reports/2020...

Serious question:

Tax laws change constantly as do the amounts you need to pay.

Accountants tend to use automated tools to calculate accurate taxes which they routinely pay yearly updates for.

What is stopping an accountant who is also a programmer to release a tool which they feed in the accurate / up to date info from whatever tools they are paying for to produce an accurate tax return?

It could be open source and donation based or priced at something that makes it a no brainer to use for everyone who isn't eligible to do free tax returns. I have to think they would make many orders of magnitude more money from this than charging their usual accounting fees to a small local group of folks but this is such a basic idea that there has to be something stopping them from doing it.

Is this because of liability concerns around providing inaccurate numbers or is there a lot of manual work being done to calculate taxes that a tool can't accurately calculate on its own without a huge amount of domain knowledge?

As a former employee of a company that was essentially trying to build the "turbo tax for accountants", we had over 200 accounts, 50+ software engineers, and still barely scratched the surface. (The project eventually shut down after burning through 25 million). The problem is that tax code is very very ugly. We had entire teams thar would specialize in a specific tax area. Even if you could codify everything, the amount things change from year to year is insane. Most accountants deal with a very small subset of tax law, and they send the rest off to specialist teams, like a big-4 accountant firm where a lots of things are done by hand or older archaic software that costs a lot of money. (Comparative to turbo tax). Even the small subset of tax law most people deal with, there are thousands of edge cases. And then, to top it off, the problem isn't really "calculating everything" but filling out the forms. Because the IRS expects PDFs.

People only file their taxes once a year and just want to move on.

Industries with infrequent transactions are more prone to abuse like this.

It isn’t a coincidence that Tax Day (April 15) is about as far away from Election Day (November 6) as it’s possible to be!

It is. Election Day is codified in the Constitution, and has been for centuries. Tax Day, in order to give people enough time, has to be a few months after the new year. No conspiracy. Having Tax Day in, say, October doesn’t make sense.

Aside from the "you only use it once a year" answer that's already been mentioned - there are ways to get out of the dark patterns, if you're alert enough. It's the same reason there isn't more of an outcry against abusive practices in the credit card industry - the most affluent and educated CC users, those who would be likely to lead an effective campaign for change, always pay off their bill in full and never deal with the CC industry's abusive practices. So it goes with TurboTax - if you give consumers an out, their much more likely to blame themselves (or blame the people caught up in it) when they're taken advantage of.

"with little complaint from consumers" -- how do you know there isn't a great deal of complaint?

"I don’t understand why consumers are not more frustrated." -- they are extremely frustrated, why do you think they're not frustrated?

I don’t see a consumer movement urging legislators to make reforms on this issue. I don’t see a great deal of resentment on social media. If we don’t collectively take action, this situation will never improve.

When was the last time someone in a televised “town hall” asked a candidate about simplifying tax filing? Honest question — I really can’t ever recall it.

Switched from TurboTax to FreeTaxUSA four years ago. Same product with a cleaner interface and far less expensive. https://www.freetaxusa.com/

I hate Intuit for the reasons mentioned here. I’ll need to choose business accounting software soon and QuickBooks seems have a grip on that market, what are the alternatives I should look at?

Dark patterns are evil, not illegal (usually). And virtually anyone with sufficient political influence to do anything about this uses an actual accountant rather than DIY.

Consumers are frustrated, or at least I am frustrated (eg when they mislead me into upgrading my plan and entering many expenses before learning the standard deduction will still grant me the biggest refund), but I'm vigilant enough to avoid granting them permission to sell my data to Mint and Credit Karma, and the amount of money I could save by going elsewhere is not great enough to make up for the inconvenience of doing my taxes some other way.

Article mentions lots of complaints: https://www.propublica.org/article/turbotax-maker-intuit-fac...

Between self-doers and people that just give their forms to their accountant lie Turbo-tax customers, at the knowledge minimum.

Is there a consensus on whose software we should be using instead? I get that they're all bad, but which one is least bad?

They pay off a lot of politicians to keep tax filing complicated.

https://www.propublica.org/article/inside-turbotax-20-year-f...

Are you using online version or Amazon downloadable one? I've been using the latter for 20 years and have never felt like it was being deliberately misleading.

I just say no to everything. I don't even e-file. I still print and mail in my tax form. All the data is stored locally on my computer.

From what I understand (and I could be wrong) they spend a decent amount of money lobbying politicians in Congress.

Customers are very much frustrated though and I believe the Cash app started letting people file taxes for free this year.

those who used credit karma previously for taxes will this year be prompted to use cash app

it's free, yeah

Past threads. Get ready for more in April...

Filing Taxes Could Be Free and Simple. But H&R Block and Intuit Lobby Against It (2017) - https://news.ycombinator.com/item?id=30185484 - Feb 2022 (18 comments)

Killing TurboTax - https://news.ycombinator.com/item?id=26330584 - March 2021 (662 comments)

Show HN: ustaxes.org – open-source tax filing webapp - https://news.ycombinator.com/item?id=26138446 - Feb 2021 (219 comments)

TurboTax Tricked You into Paying to File Your Taxes (2019) - https://news.ycombinator.com/item?id=26102695 - Feb 2021 (306 comments)

TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free (2019) - https://news.ycombinator.com/item?id=26060414 - Feb 2021 (199 comments)

FTC Is Investigating Intuit over TurboTax Practices - https://news.ycombinator.com/item?id=24409093 - Sept 2020 (194 comments)

IRS Reforms Free File Program, Drops Agreement Not to Compete with TurboTax - https://news.ycombinator.com/item?id=21923220 - Dec 2019 (448 comments)

IRS Tried to Hide Emails That Show Tax Industry Influence over Free File Program - https://news.ycombinator.com/item?id=21393758 - Oct 2019 (188 comments)

TurboTax’s 20-Year Fight to Stop Americans from Filing Taxes for Free - https://news.ycombinator.com/item?id=21281411 - Oct 2019 (447 comments)

TurboTax to charge more lower-income customers - https://news.ycombinator.com/item?id=20461169 - July 2019 (81 comments)

Congress Scraps Provision to Restrict IRS from Competing with TurboTax - https://news.ycombinator.com/item?id=20119916 - June 2019 (18 comments)

TurboTax Uses a “Military Discount” to Trick Troops into Paying to File Taxes - https://news.ycombinator.com/item?id=19994118 - May 2019 (42 comments)

Listen to TurboTax Lie to Get Out of Refunding Overcharged Customers - https://news.ycombinator.com/item?id=19870242 - May 2019 (44 comments)

TurboTax and H&R Block Saw Free Tax Filing as a Threat - https://news.ycombinator.com/item?id=19810981 - May 2019 (143 comments)

TurboTax Hides Its Free File Page from Search Engines - https://news.ycombinator.com/item?id=19758126 - April 2019 (262 comments)

TurboTax Uses Dark Patterns to Trick You into Paying to File Your Taxes - https://news.ycombinator.com/item?id=19718284 - April 2019 (274 comments)

Congress Is About to Ban the US Government from Offering Free Online Tax Filing - https://news.ycombinator.com/item?id=19613725 - April 2019 (696 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=19392673 - March 2019 (253 comments)

H&R Block and Intuit Lobby Against Free and Simple Tax Filing (2017) - https://news.ycombinator.com/item?id=18956883 - Jan 2019 (190 comments)

Would You Let the I.R.S. Prepare Your Taxes? (2015) - https://news.ycombinator.com/item?id=17751383 - Aug 2018 (424 comments)

Why I'm boycotting TurboTax this year - https://news.ycombinator.com/item?id=16844458 - April 2018 (23 comments)

H&R Block and Intuit Lobbying Against Simpler Tax Filing (2017) - https://news.ycombinator.com/item?id=16841449 - April 2018 (232 comments)

H&R Block and Intuit Are Lobbying Against Making Tax Filling Free and Easy - https://news.ycombinator.com/item?id=13922482 - March 2017 (234 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing (2013) - https://news.ycombinator.com/item?id=13853150 - March 2017 (439 comments)

TurboTax Takes Aim at Smaller Rival in Fight for Filers - https://news.ycombinator.com/item?id=11150694 - Feb 2016 (87 comments)

Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9381437 - April 2015 (150 comments)

Would You Let the I.R.S. Prepare Your Taxes? - https://news.ycombinator.com/item?id=9380232 - April 2015 (124 comments)

Filing taxes: It shouldn't be so hard - https://news.ycombinator.com/item?id=5488084 - April 2013 (56 comments)

How the Maker of TurboTax Fought Free, Simple Tax Filing - https://news.ycombinator.com/item?id=5443203 - March 2013 (330 comments)

Because We The People lack the will to demand a tax code that is other than a Byzantine train wreck.

For the 21st century, this system needs a total re-write.

Because power protects itself. And dark patterns work. Customers are frustrated and angry, and they feel powerless to do anything about it.

Idk. I just give them my info and TurboTax navigates the labyrinth that is the U.S. Tax Code. I was actually pleasantly surprised with how easy TT made things. Maybe it's bad that TT gives my info to third parties, but arguing against the practice is fighting an uphill battle because it requires listing a bunch of hypotheticals.

When it comes to taxes, I simply don't care as long as someone can tell me how much I owe!

I’d love to see Intuit file Chapter eleven.

Remember there are boomers still paying other boomers 100-1000s of dollars to prepare their taxes for them. That and regulatory capture.

I was surprised to get quoted $800 to do my taxes, i just have me w2, rsu (which always screws me up every year some how) and some investment accounts. this tax software is all expensive to use because of the investments too. i think it costs a couple hundred

They lost our business about five years ago because of them

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