Tags: tax | season | turbotax | software

TurboTax Maker Fights Hard Against Pre-Filled Tax Statements

Tuesday, 26 Mar 2013 03:26 PM

By Sandy Fitzgerald

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Attempts to simplify tax season have been thwarted in part by heavy lobbying by the makers of the top-selling software TurboTax.

Intuit has spent around $11.5 million over the past five years in its fight against return-free filing, reports ProPublica. With return-free filing, taxpayers open a return, see what the government thinks is owed, and — if they agree — that’s all there is to it.

Advocates say the system could save $2 billion nationally, as well as 225 million hours of prep costs and time.

The idea is already in use in Denmark, Spain, and Sweden, and has been endorsed by both former President Ronald Reagan and President Barack Obama.

However, Intuit, along with an influential computer industry group have fought return-free filing for years. An Intuit disclosures report showed that as recently as 2011, the company lobbied against two bills that would allow taxpayers to file pre-filled returns for free. The company also fought in favor of bills in 2007 and 2011 to bar the Treasury Department and IRS from initiating return-free filing.

Intuit claims that allowing the IRS to act as a tax preparer would result in taxpayers paying more money. It has joined efforts with the Computer and Communications Industry Association, which has a website that calls return-free filing a "massive expansion of the U.S. government through a big government program."

However, in its latest annual report with the Securities and Exchange Commission, Intuit said free tax preparation presents risks to its business. About 25 million Americans used TurboTax last year, and the software products and services comprise more than one-third of Intuit's $4.2 billion dollars in annual revenues.

Proponents of return-free filing say Intuit and other critics exaggerate the risks, and say nobody would be forced to accept an IRA accounting of their taxes. "If you don't trust the government, you don't have to do it," former Obama aide Austan Goolsbee told ProPublica.
Taxpayers with a pre-filled return could either accept the IRS’s estimate, make adjustments, or reject it and file their own return.

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