Tuesday, May 14, 2019

TurboTax, Forbes, ProPublica

The people at ProPublica may have believed they were the first to write about the difference between  TurboTax's Free Edition and TurboTax's Free File Alliance Edition. ProPublica got a lot of attention from politicians, some IRS people, and other media for writing about it. However, they were not the first to write about it.

Forbes had this story more than 3 years ago. The author didn't qualify for using the Free Edition due to having a Health Savings Account, and used a pay version of TurboTax to file, unaware of the Free File Alliance. Later she learned she could have filed using the Free File Alliance for $0.

She wrote: Moreover, if a low-income person who would qualify for the Free File Alliance Edition starts doing his or her taxes with Turbotax's Free Edition and needs a form that is not supported in the Free Edition, but is supported in the Free File Alliance Edition, Intuit will not transfer the user to the Free File Alliance Edition. (I did not quote her verbatim, but modified her words only to make the terminology consistent with my first two paragraphs.)

Unlike ProPublica, she didn't accuse TurboTax's maker Intuit of deception and fraud. She wrote about what happened to her and differences between the two TurboTax editions without harshly judging Intuit.

There is another fact pertinent to ProPublica's stories (#1, #2) the authors did not mention. Prior to 2018 the IRS allowed filing with Form 1040A or Form 1040EZ for persons with simpler tax situations. These forms were eliminated for 2018 tax returns. A filer could only use Form 1040. The eligibility criteria for using TurboTax's Free Edition versus TurboTax's Free File Alliance Edition prior to 2018 were likely tied to the rules for using Form 1040A or Form 1040EZ. The IRS's changing its rules did nothing to lessen ProPublica's invective against Intuit.

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