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Intuit pouring money into lobbying amid push for free government-run tax filing

378 points| danso | 3 years ago |opensecrets.org | reply

178 comments

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[+] peteforde|3 years ago|reply
In the meta, this article reminds me of what I perceive as a surreal disconnect between the amount of influence lobbyists have in government(s) vs the objectively small amount of money that actually is changing hands.

If Intuit spends (just) $3.5M to significantly impact decisions that are worth Billions to them and potentially hundreds to every taxpayer (!), I think I'm frustrated that corrupt politicians aren't doing more to leverage their corruption.

This kind of illegal influence should cost... at least $100M? Selling everyone out for fractions of a penny on the dollar is frankly just kind of embarrassing.

Crime harder, elected reps, if you're going to get out of bed.

[+] Aunche|3 years ago|reply
Most people have a fundamental misunderstanding of how lobbying works. Lobbying money is used to pay the actual lobbyists to gather evidence, prepare presentations, and draft legislation proposals. Only a small percentage of lobbying money goes to the politicians. Usually, it's $1000 or so that the politician will agree to hear out the lobbyist. What actually gets traded at these lobbyist meetings is political capital, not money. "If you agree to these tax incentives, you can brag about creating 10,000 jobs".

This is why Bill Gates can't just spend $1 billion to lobby for a carbon tax, despite advocating for one. This would cause a lot of short term pain as the economy needs to readjust with no short term positive benefit, which would be politically disastrous.

Edit: Here's another more tangible example. Facebook spent millions to lobby for the government to establish standards for social media. If they can convince the Democrats to formalize guidelines of what constitutes as hate speech, they can offload some of the burden of their moderation decisions. If they can convince Republicans to require social media to become public square, that's even better because then they don't have to hire as many moderators. Unfortunately for Facebook, such a bill has no benefit from either side because now the politicians have to take responsibility for an unpopular act of censorship or viral misinformation campaign. That's why Facebook tried to establish an independent "supreme court" instead.

[+] pessimizer|3 years ago|reply
Politicians are very cheap, but the $3.5M is what was spent legally and openly. Most of the iceberg is hidden underwater. For example, this:

> In 2022, several members of Congress called for investigations into the company’s practice of hiring “revolving door” lobbyists who previously held government positions

is also bribery.

[+] rapht|3 years ago|reply
Meanwhile, in normal countries:

- salaried income is automatically submitted to tax authorities

- capital income going through financial institutions is automatically submitted to tax authorities

- the deductions that concern most taxpayers are managed automatically

And so it for 80% of taxpayers, tax prep is exactly 5 minutes, and for the next 10% it is 2 hours.

And then, Americans explain that bureaucracy is quite worse elsewhere.

[+] arcticbull|3 years ago|reply
Honestly they're terrible people, but their software is okay. If they're going to continue to undermine the IRS' efforts - and the IRS wants to provide clean modern tax filing software - they should just buy the business off Intuit.

You heard it here first folks: I'm calling on the US government to nationalize TurboTax.

It's the pragmatic choice.

[+] toomuchtodo|3 years ago|reply
Can't reward this extreme rent seeking behavior, even if that means it would cost more for IRS to rebuild what Intuit provides. It's not about the money. You have to send a message. Otherwise you'll just encourage future poor behavior. Intuit has been up to this fuckery for two decades [1]. We build the public goods, then we defend the public goods.

I would rather donate directly to the IRS project to replace Turbotax [2] before giving Intuit another dollar.

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

[2] https://news.ycombinator.com/item?id=34764952

[+] izzydata|3 years ago|reply
I don't see the point in the IRS running TurboTax themselves. The IRS should simply keep track of everyone's taxes and automatically send refunds or bills accordingly. Spend any extra money they have on auditing the rich.
[+] xboxnolifes|3 years ago|reply
The problem isn't that the US government is incapable of making a better system than TurboTax. The problem is that TurboTax only exists because they lobby to prevent the government from doing so.

From that perspective, TurboTax isn't worth buying for anywhere close to what someone may evaluate it on the private markets.

The US government should buy it for $3.5MM, since that's what Intuit values it at through lobbying.

[+] noodlesUK|3 years ago|reply
I actually think this might be a great solution. Buy the shareholders out at a fair price, stop the damn lobbying, get some pretty good tax software in the process.
[+] programmarchy|3 years ago|reply
I don't disagree with you, but doesn't the IRS already know most of the information you're putting into the forms?
[+] RC_ITR|3 years ago|reply
I'm all for better public services, but the Federal Government making the software that states use to collect taxes would be a disaster, purely for petty political reasons.
[+] kristopolous|3 years ago|reply
They wouldn't though. It would instead be industry capture as intuit is grossly compensated through a back channel that never gets allocated a budget to run an audit of. Then with a guaranteed revenue base, all the developers would get sacked as they coast.

You'll need actual real socialist* legislators who are well educated in actual real socialism* in order to pull that off without some wacky neoliberal private-public bait and switch nonsense.

* - as opposed to the legislators accused with the label "socialists" who actually work towards regulated free market structures as advocated for by Friedman and Hayek.

[+] JohnFen|3 years ago|reply
Now this is an idea I could get behind!
[+] ilamont|3 years ago|reply
How has Intuit avoided antitrust investigations? I'm not talking about TurboTax. Intuit's Quickbooks is basically a monopoly in the U.S. with all of the attendant characteristics of a monopoly ... poor performance, huge price increases, taking advantages of SMBs and sole proprietors that are forced to use it for their businesses.
[+] mtoner23|3 years ago|reply
In this market there is plenty of compeition that is driving down prices. me personally i switched from hr block to freetaxusa and i saved 50$. As far as markets and antitrust is concerned there are no monopoly problems here.

I wish an agency like the CFPB or FTC could step in to say, although the market here is "working" there are still consumer concerns not being addressed that you must address.

[+] fragmede|3 years ago|reply
Maybe Taylor Swift needs to have a public Twitter spat with her bookkeeper. At least, that's what got the ball rolling on Ticketmaster.
[+] ThatPlayer|3 years ago|reply
It's not illegal to have a monopoly. From the FTC: https://www.ftc.gov/advice-guidance/competition-guidance/gui...

> it is not illegal for a company to have a monopoly, to charge "high prices," or to try to achieve a monopoly position by what might be viewed by some as particularly aggressive methods. The law is violated only if the company tries to maintain or acquire a monopoly through unreasonable methods.

[+] jjeaff|3 years ago|reply
I don't know what QuickBooks market share is, I have seen estimates between 60 and 80%. But there are definitely a lot of direct competitors as well as indirect competitors gnawing at their heels with services like invoicing and payroll and payments. I don't see any real barriers to entry created by intuit, especially since the QuickBooks export format is an open format.

But, there definitely should be a lot of scrutiny for any additional acquisitions that Intuit makes, because they are definitely big enough to just buy any company that begins to challenge them.

[+] Someone1234|3 years ago|reply
Because every market in the US conveniently turns into a Duopoly which is never subject to antitrust. Intuit has H&R Block.
[+] PaulWaldman|3 years ago|reply
They are like a version of Adobe, but across more industries. There are competitors like Xero for small business accounting.

I'd imagine most of QuickBooks' continued market share is momentum from CPAs who drive SMBs to QB. One platform to interact with for all your clients makes life easier.

[+] throwaway12245|3 years ago|reply
Sounds like an opportunity for some competition.
[+] briga|3 years ago|reply
Monopoly would imply that there are no viable alternatives, which isn’t really true at all. There are dozens of companies with similar products.
[+] renlo|3 years ago|reply
What's a viable alternative to TurboTax for those who are unable to self-file? I know Intuit is an evil company, but whenever it's tax season and I'm confronted with either (a) learning how to file my own taxes or (b) kicking the can down the road and paying Intuit $100, I choose (b). I had an accountant for a couple years because my taxes were complicated due to changing states. My accountant charged me $1000, which I did not mind paying because my taxes were complicated. When my taxes became substantially less complicated last year, he still charged me $1000, which I _did_ mind paying. So no more accountant! The unfortunate reality is that Intuit's software works well and they've priced it at a point where most people just accept the fee and move on. As we get nearer to Tax Day 2023, I feel that I'm just going to accept their fee and move on with my life, even knowing how problematic they are.

Is there a viable alternative (cheap tax software)?

Is there a simple source of information where a person can learn everything they need to know about filing their taxes in an hour or two? Taxes seem to be kept intentionally arcane because so many make a living from understanding it without allowing me to understand it.

[+] cantaloupe|3 years ago|reply
I’ve used FreeTaxUSA and recommended it to many friends. Federal is free and state is $15 (if your state has income tax). For W-2 plus investments and house, it was a breeze. And they cover many more forms than just that: https://www.freetaxusa.com/supported_forms.jsp
[+] LVB|3 years ago|reply
Over the years I've greatly appreciated being able to download the tax app and save my tax prep work as honest to goodness files. It does sound archaic, but when I want to run a what-if scenarios, it is as easy and duplicating the file and editing to my heart's content. This can be a tricky operation with some online options. Navigation and direct form editing tends to be a bit better in desktop versions too.

For downloadable software, I've used TT but have more recently switched to H&R Block. It works fine, and at a decent discount from TT (~$35 for H&R Block "Deluxe", including state return).

[+] valarauko|3 years ago|reply
I'd seen recommendations on here in the past for FreeTaxUSA so used that for the first time this year - already got my refund as well! It's free for federal filing, and $15 for each state filing. The interface is easy enough to understand, and I appreciated the many options - it does help to know what deductions apply to you, so at least a cursory understanding of your old filings is probably necessary. I believe it can import your old TurboTax filings and figure stuff out from that, but it's not something I did and was easy enough to set up and finish in the span of an evening. The various deductions are laid as a questionnaire, and I appreciated that they were marked as rare deductions that most people don't need - but there in case you need it.
[+] fragmede|3 years ago|reply
If the fee is a flat $1,000, the other way to get more value is too complicated the hell out of your situation. Have you ever thought of starting a nonprofit foundation?
[+] user3939382|3 years ago|reply
I can't wait for Intuit to go the way of the phone book and telemarketing companies. Disappear overnight without so much as a whisper and not a single tear would fall. They are a blight on the public.

Their existence is a good litmus test/proxy for determining if or whether the complete capture of our so-called democracy by corporations has receded.

[+] remote_phone|3 years ago|reply
They’ve been doing this for decades now. This isn’t a surprise in the least nor do I expect them to stop unless someone speaks up for our rights.

I have a very simple tax situation. I get a paycheck twice a month and sometimes I buy and sell shares. The idea that I have to go through a multi-hour exercise when all of this should be accomplished via computers automatically is stupid to me. It’s companies like Intuit that are trying to protect their moat and hurting us when it should be a quick payment or refund form we get once a year like a Costco rebate check.

[+] pmulard|3 years ago|reply
For anyone looking for alternatives, freetaxusa and CashApp are both great. I used the former for one year after I couldn’t get TurboTax for free anymore. Federal is free and state is $15 per.

Switched to cashapp for the past two years because it is completely free. Both are a smooth experience.

[+] dang|3 years ago|reply
Tax season is tax lobby rage season!

Related:

IRS builds task force to explore running its own free e-file system - https://news.ycombinator.com/item?id=34764952 - Feb 2023 (199 comments)

IRS Free File: Do Your Taxes for Free - https://news.ycombinator.com/item?id=34462122 - Jan 2023 (247 comments)

IRS will look into setting up a free e-filing system - https://news.ycombinator.com/item?id=32753099 - Sept 2022 (408 comments)

The IRS could be on the verge of changing the way Americans file their taxes - https://news.ycombinator.com/item?id=32550841 - Aug 2022 (17 comments)

IRS will study free tax filing options - https://news.ycombinator.com/item?id=32502321 - Aug 2022 (25 comments)

TurboTax’s fight against free tax filing - https://news.ycombinator.com/item?id=31072202 - April 2022 (394 comments)

Filing taxes could be free & simple. H&R Block & Intuit lobby against it (2017) - https://news.ycombinator.com/item?id=30856968 - March 2022 (114 comments)

FTC sues Intuit for its deceptive TurboTax “free” filing campaign - https://news.ycombinator.com/item?id=30846071 - March 2022 (587 comments)

Ask HN: How does TurboTax get away with dark patterns? - https://news.ycombinator.com/item?id=30409523 - Feb 2022 (122 comments)

Why do Americans have to pay much to file their tax returns when the IRS knows? - https://news.ycombinator.com/item?id=30267361 - Feb 2022 (22 comments)

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)

California tried to save the nation from tax filing, then Intuit stepped in - https://news.ycombinator.com/item?id=28944200 - Oct 2021 (283 comments)

The IRS has a big opportunity to fix the way Americans file taxes - https://news.ycombinator.com/item?id=28177289 - Aug 2021 (12 comments)

UsTaxes – open-source tax filing web application - https://news.ycombinator.com/item?id=27998452 - July 2021 (53 comments)

Good Riddance, TurboTax. Americans Need a Real ‘Free File’ Program - https://news.ycombinator.com/item?id=27902380 - July 2021 (248 comments)

Intuit will no longer be a part of IRS Free File program - https://news.ycombinator.com/item?id=27865625 - July 2021 (140 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 stops firms like TurboTax from hiding free tax-filing products in searches - https://news.ycombinator.com/item?id=21948935 - Jan 2020 (25 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)

Filing Your Taxes Is an Expensive Time Sink. That’s Not an Accident - https://news.ycombinator.com/item?id=19572917 - April 2019 (155 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)

IRS electronic filing system breaks down hours before midnight deadline - https://news.ycombinator.com/item?id=16860086 - April 2018 (97 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)

Stanford Professor Loses Political Battle To Simplify Tax Filing Process - https://news.ycombinator.com/item?id=13990391 - March 2017 (386 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)

US Senator Warren Introduces Bill to Simplify Tax Filing - https://news.ycombinator.com/item?id=11492025 - April 2016 (155 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)

TurboTax Maker Intuit Funnels Millions to Lobby Against Easier Tax Returns - https://news.ycombinator.com/item?id=7595440 - April 2014 (182 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)

Intuit lobbies against California's free tax filing service - https://news.ycombinator.com/item?id=1569169 - Aug 2010 (29 comments)

[+] mochomocha|3 years ago|reply
... To the surprise of no one. That's what regulatory capture + corrupted democracy (ie "lobbying") looks like.
[+] swamp40|3 years ago|reply
They are already connected to the IRS. I forgot to add in an Economic Impact Payment when I filed with TurboTax last year. 5 minutes later, the corrected 1040 came back to me. They already know everything, I don't know why they make us do all the work. Maybe in case THEY miss something?
[+] 1270018080|3 years ago|reply
I have yet to see anyone defend Intuit's bribery and corruption on any forum. I'm sure there are plenty of Intuit employees on HN. Do any of you want to defend the other side? Or maybe a non-Intuit employee can play devil's advocate?
[+] slg|3 years ago|reply
I wish more people would blame the government officials for being so susceptible to lobbying and refusing to enact policies to curtail the behavior rather than be angry at individual companies for lobbying. As the old saying goes, don't hate the player, hate the game. Intuit is just operating in the best interest of their stockholders and employees. It isn't their job to operate in the best interest of society. That is the government's job. This situation is a governmental failure not any problem with Intuit specifically and it happens in plenty of other areas besides tax reporting.
[+] thewildginger|3 years ago|reply
They are players in this game too. They could "lobby" Congress to change the laws to allow them not to be shitty. But they won't. Part of stopping the game is shitting on ANYONE who wants to play that wah
[+] px1999|3 years ago|reply
I'm really curious how lobbying for something like this works in practice.

I work with (non-us) government and while I don't doubt some background level of corruption, in experience there's always been an emphasis on documented probity and making defensible decisions.

How does that $3m of lobbying actually work? Do lobbyists provide arguments to lawmakers (are there any except the tenuous one that the taxpayer money could be better used elsewhere?), or is it literally just spent on wining and dining the right people and asking them to block specific legislation?

[+] cheriot|3 years ago|reply
If Intuit can get results with < $4m in lobbying that's an incredible rate of return. They made $2,066m in net income last year.

For the influence they've clearly had there's got to be other money flows.

[+] Ericson2314|3 years ago|reply
Lobbying is surprisingly cheap. We should probably pay our politicians way more, uncomfortable as that sounds to many.
[+] eat|3 years ago|reply
Really surprisingly low number here. $3.5 million doesn't seem like a lot to spend considering what I imagine they'd lose if they lost this tax-prep business. Did we lose a zero somewhere?
[+] programmarchy|3 years ago|reply
Sad that politicians can be "bought" for a measly 3.5 million. Especially considering the cost to Americans is probably in the ballpark of hundreds of millions, if not more.
[+] jimt1234|3 years ago|reply
There was a bribery scandal at my college years ago. But, what was more shocking than professors and teaching assistants accepting bribes, was how small and seemingly insignificant the bribes were. I recall one professor elevated the grades of an entire fraternity because they sent pizzas to his office after midterms (when the exams were being graded).
[+] bastard_op|3 years ago|reply
This is the same thing they've been doing for the past 20-30 years now to stay at all relevant as a business. The only reason taxes still cost to file is Intuit and the other scab companies that sell software to everyone. Cheaper to pay off politicians in "lobbying" them vs. getting a modern business model.
[+] VWWHFSfQ|3 years ago|reply
If turbotax was better than the free gov site then I would still use it. Good to have a free option though.