Paul L. Caron

Wednesday, October 7, 2009

Ventry: TurboTax Tries to Block Free California e-Returns

Following up on my prior post, TurboTax Tries to Kill California's ReadyReturn:  Dennis J. Ventry, Jr. (UC-Davis) has published an op-ed, Intuit Uses Clout to Stymie State Innovation:

Intuit, the maker of the tax preparation software TurboTax, sells its products on the promise to make paying taxes easier. But for the last several years, it's been doing everything in its considerable power to make that process more difficult for hardworking Californians. ...

First, Intuit says the state can't afford ReadyReturn. Intuit is wrong. ReadyReturn saves the state money, netting $80,000 annually. California's free online filing system, CalFile, nets another $440,000. Intuit wants to abolish that program, too.

Second, Intuit says ReadyReturn threatens taxpayer privacy. Intuit is wrong again. ...

Third, instead of ReadyReturn, Intuit wants California taxpayers to use Free File, software provided by private sector providers, including Intuit. Once again, Intuit is thinking of itself rather than California. Free File is inferior to both ReadyReturn and CalFile in every respect: coverage, capability and cost. ... 

Intuit wants to kill ReadyReturn and CalFile, two programs that save Californians considerable money, time and anxiety. I have a better idea. Let's show Intuit that Californians don't like corporations that act in this manner. Tell your legislator not to let Intuit win.

News, Tax | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference Ventry: TurboTax Tries to Block Free California e-Returns:


I don't understand why there is a need for a free tax prep program. Anyone can prepare their tax return for free the state and federal forms including instructions are readily available at the Post Office and other institutions. All one has to do is prepare them by hand and use a calculator. Now I understand for some people this is not an easy task but there are various programs throughout the country offering free return preparation services i.e. VISTA. Obviously there are people that don't qualify for these programs or the free online tax software that companies such as Intuit provide which the State of California wants to address. Now as much as I understand and appreciate the, "if its free it's for me" concept why would anyone want to trust the government in providing a services to prepare your tax return. In other words, will the a government service seek to maximize my refund or give me options to pay the least tax or will they simply offer a program that provides the most tax revenue to the unsuspecting and ill informed.

Posted by: Clinton | Oct 13, 2009 9:28:57 AM

Regarding Woody's reference to Intuit's attempt to clarify their policy stance, something that should be clear is that the state free program that they offer will not replace - one for one - what would be given up if ReadyReturn were terminated. As the Ventry article points out, almost one-half of this year's ReadyReturn users wouldn't qualify for Intuit's free state TurboTax offer. What is really misinformation is that this issue has been sold in the policy debates as an equal trade-off. But it is not. Tens of thousands of this year's ReadyReturn users would have to pay for software or for a preparer if it went away. Why? Because they make too much to qualify for Intuit's free program. What's too much? As an example, a dental technician making $31,000 a year would not qualify. Nor would a single mother making $36,000 a year. And on and on. If you want to talk facts, you should start with who's impacted here. As far as the state and federal return together issue, one should note that the federal free file program dropped 30% in participation this year, and most participating states experienced similar drop-offs.

Posted by: Bob | Oct 8, 2009 12:46:49 PM

A. Saunders, brief comments don't lend themselves to long or overly scholarly and critical analyses of articles. Sometimes conclusions comes from perceptions, which, based upon long-time experiences, turn out to be correct.

I appreciate your question and will attempt to connect my perception with an analysis of information provided.

Here's what caught my attention in the article.

It's one thing for a corporation to pursue every last dollar of profit. It's quite another for it to violate the public trust and to strangle a state and its citizens at a time when neither can afford it. ...Intuit is thinking of itself rather than California. ...Let's show Intuit that Californians don't like corporations that act in this manner. Tell your legislator not to let Intuit win.

Does he think that his state and citizens are the only ones with problems and that corporations are supposed to forget its own interests simply to help him?

Also, this commenter agreeing with him is typical of those who perceive his real intent.

When interacting with the government there should always be a free, government provided option.

The writer wants Intuit to put his interests over the interests of its shareholders. Either he wants his preferred solution to save money for his interests or he is quite anti-business, or both.

Also, he peppers his article with claims that don't withstand scrutiny, which makes his conclusions suspect or misleading. Look at the "fact checking" of the author's statments and additional information in the comments below it.

(1) Ready Return has managed to attract only 60,000 eligible taxpayers. Ventry says Ready Return saves money, but with so few taxpayers using it, that costs the state $3 per return. If those taxpayers had used Free File, the cost would have been less than $1 dollar per return to the state.

(2) you want the agency who's collecting be responsible for preparing your taxes? you really think government will build tax preparation software for no money?

(3) Julie from Intuit here. There is a lot of misinformation about Intuit’s position on Ready Return and on the benefits of the Free File program in this important public policy debate. Over the past 10 years, the last 7 as part of the Free File program, Intuit has donated more than 20 million tax returns to low and middle-income Americans. We believe Free File is right for CA and for CA state taxpayers, not only because it doesn’t cost the state or the people any money, but because it enables Californians to prepare and file BOTH their federal and state taxes together....

And, to put the problem at the doorstep of the party creating the problem:

(4) The fact that you have to pay someone, have access to a computer and buy software to do your taxes is a testament to how screwed up our tax system really is.

Either the state through the taxpayers or Intuit through its shareholders pays for what this guy thinks should be completely "for free." That's why I said that he wants the entire pie for free rather than appreciating the slice that he aleady receives for nothing. In the end, however, it seems that is typical liberal university whining about capitalism.

I'd like to know how this law professor would act if he ran a business, as though he could. He sure isn't giving away his teaching salary. Shouldn't students get taught "for free" rather than him trying to "strangle a state and its citizens at a time when neither can afford it?"

A. Saunders, I don't know if this answers what you asked to your satisfaction, and it is a somewhat venting response, but I did try in earnest to give you my views and why I have them.

Posted by: Woody | Oct 8, 2009 10:54:43 AM

Woody, I am not going to say you are wrong, but you failed to explain why "This guy isn't happy with a free piece of pie. He wants the entire pie and have someone else pay for it." I did not see anything in the article which shows that the author is looking for a "free piece of pie."

My understanding is that Ready Return works great if the tax payer is taking a standard deduction and only has simple income items, such as W-2s or 1099s. Turbo tax is for more complex tax maters. I agree that it might be in Intuit's interest to get CA to stop providing Ready Return, but the original article disputes the validity of the reasons Intuit proffered. Furthermore, the author goes on to state that between the two choices, Ready Return and Intuit's Free File, Ready Return is a superior product. He concludes, that as the tax paying public (the customers) we should let our representatives know that we would prefer the better product.

He might be wrong in which is the better product, but I do not see how you can take issue with his intelligence. Especially when you failed to state why he is wrong.

Posted by: A. Saunders | Oct 8, 2009 2:06:11 AM

Intuit is thinking of itself rather than California.

What a whiner. This guy isn't happy with a free piece of pie. He wants the entire pie and have someone else pay for it. The nerve of a coroporation looking out for the interests of its shareholders.

If that's the level of intelligence from a law professor at UC-Davis, I hope he doesn't have tenure...but, unfortunately, this makes him shine in the eyes of liberal academics.

Posted by: Woody | Oct 7, 2009 10:23:14 AM