TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, March 26, 2008

TurboTax, But Not TaxCut, Allows Civil-Union Returns

Last week, I blogged several rankings naming TurboTax the #1 tax preparation software, over TaxCut and its other competitiors.  Today's news brings another reason to favor TurboTax:  it allows civil-union returns by gay and lesbian couples, while TaxCut does not in certain states.  Same-Sex Couple Blocked By H & R; Tax Preparer Says Its Computer Software Can't Support Civil-Union Returns (Hartford Courant), by Mark Pazniokas:

After 23 months of same-sex, civil-union bliss, Jason Smith and Settimio Pisu had grown accustomed to some institutions being not quite ready for the concept of gay spouses. There was that long day at the DMV trying to jointly register a car, which ended pleasantly enough with an apology from a clerk. And don't even ask the Guilford couple about their adoption stories.

Still, Smith and Pisu weren't ready for the online message that popped up as they tried to file their taxes on H&R Block's website: "We don't support Connecticut Civil Union returns." ...

The giant tax preparer was willing to prepare the couple's taxes at one of its offices for $199.80 — $155 more than the online price. Not good enough. As the American Civil Liberties Union noted Tuesday in a letter to H&R Block, that's discrimination under a Connecticut law that forbids denying "full and equal accommodation" on the basis of sexual orientation or civil-union status.

"We therefore demand that H&R Block cease immediately this discrimination against taxpayers in civil unions," Rebecca Shore, an ACLU lawyer, said in a letter to H&R Block's interim CEO, Alan Bennett. H&R Block, based in Kansas City, Mo., said in an e-mailed statement that it was evaluating ways to offer online support to couples in civil unions and domestic partnerships. The company said its competitors have similar problems.

H&R Block has managed to rewrite its software to handle gay marriages in Massachusetts, but not so with civil unions in Connecticut or Vermont, Smith said. "It's really not that complicated," Smith said.

TurboTax has figured it out, he said. "When you go through their website, not only do they support the return, they tell you it's cheaper to buy" the software, rather than to file online, Smith said. The reason is that TurboTax charges online for each return, and gay couples in civil unions cannot file joint federal returns. "They are actually looking out for you and trying to save you money," Smith said. "That's a completely perfect response."

(Hat Tip:  Ann Thomas.)  See also Associated Press:  ACLU Pushes for Connecticut Civil Union Filings, by Susan Haigh.

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Maybe there's not enough competition in that market yet? If there were more tax prepaper services I guess the field owuld have been more levelled.

Posted by: Ben Pillerk | Mar 26, 2008 2:07:16 PM