Paul L. Caron

Wednesday, January 14, 2015

TurboTax Customers Angry Over Change In Tax Return Software

Turbo Tax (2015)CBS News, TurboTax Customers Angry Over Change In Tax Return Software:

Changes to the popular tax program, TurboTax, has some customers mad.

“People are just livid. They feel deceived,” says consumer advocate Edgar Dworsky. “They feel they’ve used this product for so many years, they’ve trusted it, and now they’re being sandbagged.” Dworsky is a TurboTax customer unhappy after Intuit, the maker of TurboTax, changed the deluxe version of the popular tax preparation software product.

The changes require customers to upgrade to more expensive versions if reporting investment, self-employment, or rental income — costing an extra $30 to $40 — and surprising many long-time Turbo customers. “Imagine their surprise when they get halfway through doing their taxes and there is a roadblock in the program that says you have to upgrade,” added Dworsky.

“It can be viewed as a bait and switch, yes,” Prof. Bryan Menk told KDKA money editor Jon Delano on Tuesday, “because people were not accustomed to this limitation in a prior year.” Menk teaches taxation at Duquesne University and uses TurboTax himself.

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Free update crashes existing install, forcing complex uninstall process that took more than an hour to figure out.

Posted by: Tom Urbanik | Jan 31, 2015 6:34:03 AM

See pages 229-233 of "The Fine Print," by David Cay Johnston for the complete TurboTax story. Tax Law Professor Dennis Ventry's calls Intuit's defense "Intuit's Nine Lies."

Posted by: Reginald Neale | Jan 21, 2015 8:55:25 AM

There are many better alternatives for filing your taxes. Innovative new companies are entering the market every season. If TubroTax keeps this up, they'll be a case study, not a viable business, in a few years.

Posted by: 1040EZ | Jan 15, 2015 11:44:58 PM

By now we all know about the problem and while I am not thrilled about this screwup, I will say that Intuit has owned up to their mistake and made it easy to get the Premier upgrade:
1. Start up Deluxe and open your return
2. Go to schedule D
3. It will ask you if you want to upgrade, click yes and then click something about not having the upgrade code (if that's not right, wait for the agent to guide you to the correct spot)
4. Call 1-800-445-1875. I expected to wait a long time and settled in with the call on speaker but at 08:30 PST, I got an agent in under one minute
5. Calmly explain that you are one the folks blindsided by this change and you need the Premier upgrade
6. The agent will ask for the serial number which you will see on the screen
7. After about a minute or so , the agent will give you the number
8. Enter it and you are done
All in all, rather painless. I asked the agent if she has had many of these and she said yes.

Posted by: TheOldman | Jan 15, 2015 10:02:06 AM

Intuit is a marketing company at this point. That's OK, nobody makes anyone buy anything from them.

They don't really innovate in any of their products (TT, QB, Quicken) any more. Creating phone apps and on-line versions don't really count even if they're worth paying for.

Posted by: BillD | Jan 15, 2015 9:48:31 AM

I suggest we post this article and others on FaceBook. Over 20 years of using TurboTax and now the bait and switch. I am returning my software post haste and buying another tax product. There are some free programs as well. Please share and get the word out - 20 years and out now. I will not be using the other intuit products either.

Posted by: Paul | Jan 15, 2015 4:40:40 AM

It's unfortunate that Intuit has gone down this path, but fortunately there's companies like H&R Block that actually care about the customers! H&R Block recently announced they are offering their software for free to all who purchased TurboTax and realized they aren't getting what they though they purchased! Check out H&R Block's press release:

Posted by: Jeremy | Jan 14, 2015 6:47:26 PM

I've used TT for about 20 years. No mas.

Posted by: PacRim Jim | Jan 14, 2015 6:04:57 PM

That's Intuit's business model: Get people hooked with decent software at low prices and then jack up those prices substantially over a period of time, with the idea that they will lose customers but will make up for that with the higher prices. That has happened with its ProSeries professional tax prep software and QuickBooks. It may be a good business model according to accounting spreadsheets, but it alienates long-term, loyal customers.

I'm one who had been with them since 1987 but finally gave up, because the value was no longer there, I was tired of paying more and more as comptition offered better options, and I didn't mind the conversion, which stalls many people. I no longer recommend any Intuit programs because of this way that they do business.

Posted by: Woody | Jan 14, 2015 3:09:35 PM

I've been using Tax Act for years. My only complaint is that once you upgrade to file both state and federal, you can go back to free. So, I just opened a second account (my state now has super easy online filing.) As a bonus, a few years ago, Tax Act was the ONLY software to correctly deal with a last minute change to a college tuition credit.

Posted by: Joe | Jan 14, 2015 1:39:00 PM

This reminded of the last TurboTax controversy in 2003 which caused me to switch to H&R Block's TaxCut (which I've been happily using ever since). Back then I had a series of email exchanges with Intuit, culminating in the general announcement of their capitulation (below) and my own acknowledgement of their contrite actions. But despite their protestations back then that they were "committed to listening and learning from our customers" and desired to "maximize customer experience and preserve customer satisfaction", they have apparently regressed to their old bad habits. With this latest bait-and-switch, I see no reason to ever again consider using TurboTax.

Sent: Thursday, May 15, 2003 9:10 AM
To: Wiener, Daniel
Subject: Re: Your Feedback

Dear Valued Customer: In response to your comments on the implementation of product activation technology in tax year 2002 TurboTax(R) software, I wanted to let you know that Intuit will discontinue product activation in next year's TurboTax desktop products purchased at retail or direct from Intuit. We are absolutely committed to listening and learning from our customers. We clearly need to better understand all of our customers' tax preparation needs and how they use TurboTax. While we remain committed to protecting our intellectual property, going forward, we will only introduce digital rights management technologies that maximize customer experience and preserve customer satisfaction. Again, thanks for your feedback.
Regards, Tom Allanson, Sr. Vice President TurboTax

From: Wiener, Daniel
Sent: Thursday, May 15, 2003 10:43 AM
Subject: RE: Your Feedback

Dear Mr. Allanson,
I'm very happy to hear that you've discontinued product activation. It was because of product activation that I purchased "TaxCut" this year instead of "TurboTax". Previously I had used TurboTax for many years, and would have habitually continued to use TurboTax except for the product activation controversy. As it turned out, I was rather pleased with TaxCut, and I was able to import my TurboTax files from the previous year into TaxCut without any problem. TaxCut was slightly cheaper, and it seemed to work just fine. I'll have to see next year whether there is a compelling reason to switch back to TurboTax. As a rule of thumb I tend to stick with a software package that I am satisfied with, and at the moment I'm satisfied with TaxCut. But at least there is no longer a hard barrier to my selecting TurboTax.

Posted by: Daniel Wiener | Jan 14, 2015 1:23:20 PM

Please look carefully at the ownership of INTU. It's 91% mutual funds and Institutions. The two largest holders are Vanguard and American Funds. Perhaps our expectation of maximum investment returns drives the decisions to deceive customers. All this done in the name of shareholder value. We are the shareholders and not the 1%.

Posted by: David Hitchcock | Jan 14, 2015 12:50:15 PM

I purchased Proseries 50 return package in 2012. I am not an everyday preparer, but I get tax clients that want me to do this for them, and I oblige. I got a notice at the end of 2013 that I would no longer be able to prepare 2012 returns unless I bought 2013. I had only prepared 18 returns. I paid for 50. I now use another product that gets the job done for significantly less. Needless to say a few choice words were exchanged with customer service over that fraud.

Posted by: Daniel | Jan 14, 2015 12:41:06 PM

Here at Intuit, we're not happy till you're not happy.

Posted by: Eddie from Accounting | Jan 14, 2015 12:02:19 PM

Why is the voting populace so stupid that they accept a tax code that is complicated and more social engineering than revenue for the state? Why is the populace so stupid it accepts tax codes that simply cannot be carried out without enriching a software company that makes expensive, bloated, ill-function software? Why is there an income tax and an IRS? Once again, what makes the populace so stupid?

Posted by: Ted | Jan 14, 2015 10:52:02 AM

I dropped Intuit's Quicken in '05 "because I found nothing better." And nothing is what I used for the next several years. I also dropped Turbotax at the same time, for the same reasons: they didn't respect their customers, so why should I spend my money there?.

Posted by: pyotr | Jan 14, 2015 9:57:17 AM

I too have returned my copy to Costco. Turbo Tax has been pulled the wool over its faithful customers this year by omitting Schedules C, D and E from its "deluxe" package.

Posted by: yldwst | Jan 14, 2015 9:51:16 AM

Intuit has always been like this. I've been using Quickbooks Pro for 15 years and Intuit are a s s e s.

Posted by: Jim | Jan 14, 2015 9:17:13 AM

The box is clearly marked "plus Federal E-File", not "plus Federal E-File*" with * defined as "except for the following forms". Wow this smells like legal trouble. I have used TT since the early 90s (floppies). What a disaster for Intuit!

Posted by: TheOldman | Jan 14, 2015 9:16:24 AM

Especially when the title the incomplete version "deluxe," which implies that this would be the complete top-of-the-line version of the software.

Posted by: Alec Rawls | Jan 14, 2015 9:07:55 AM

I worked for TurboTax for 6 years so I am not surprised by this news. They have a large team of people dedicated to testing and optimizing price and they have been considering doing this for a couple of seasons.

Vote with your wallet, there are other solutions out there.

Posted by: Bill Hendricks | Jan 14, 2015 9:03:13 AM

Not surprising. Not surprising at all. As a business, I rank Intuit alongside Comcast with its infamous "the customer is always wrong" policies.

My rotten experience with Intuit is over a decade old. I was a Intuit Quicken Mac user. When Macs shifted to OS X, for year after year Intuit promised to upgrade the Mac version to keep off the competition, but didn't deliver. Making this sort of move with their tax software is par for the course.

One thing I've learned in life is that some people are just jerks, doing whatever they can get away with. That's true of Comcast. It also seems true of Intuit.

If Intuit doesn't correct this bait and switch in the next month or so, I'm demanding a refund and taking my business elsewhere permanently.

Posted by: Michael W. Perry | Jan 14, 2015 9:01:37 AM

As long as folk continue to use the service, the company will continue to gouge them

Posted by: JIMV | Jan 14, 2015 8:30:38 AM

Intuit is a member of the left-wing agenda group "Business Forward," which is closely allied with "Organizing for Action." []

Posted by: Chas C-Q | Jan 14, 2015 8:25:58 AM

I have been a Turbotax customer for years and have know since I started using the product that one version worked for 1040ES returns, another for standard deduction with only income, and others for investment, real estate, or business use.

Your article is a sensationalist piece of crap.

Posted by: mikee | Jan 14, 2015 8:17:21 AM

Can be seen as a bait and switch? No, it really is.

Posted by: Chris | Jan 14, 2015 8:12:47 AM

Great opportunity for H&R Block's advertisement campaign!

Posted by: Alan | Jan 14, 2015 7:54:52 AM

It's the same with Quicken. I got a nice discount offer, one day only, in December. A few days after that, I get a letter in the mail, informing me that I must upgrade or I can no longer do online banking. Of course, now they want full price. I contacted Intuit, and they offered me the discount providing that I say "yes" immediately. The entire thing leaves a horrible taste in my mouth. I've used Quicken since 1990, and Quickbooks off and on during the years, so it's not like I've not been a loyal user.

Posted by: geek49203 | Jan 14, 2015 7:48:45 AM

I just ran into the sasme problem on using it for my taxplanning, almost all taxpayers have some capital gain if they hold any stocks,mutual funds etc.
I am returning my copy to Costco, and will switch to Hand R block. I think the people running our airline pricing have gotten involved in their pricing.

Posted by: Paul B Berg CPA | Jan 14, 2015 7:44:00 AM

You should see Intuit's *online* version of QuickBooks. Impenetrable and clunky interface. I've used the native product for years and loved it. But the online version is horrible. I complained in detail a couple months ago but never got any response. Makes me wonder what's going on at Intuit headquarters with the TurboTax and QuickBooks problems..

Posted by: Don | Jan 14, 2015 7:28:07 AM

I've used TurboTax since about....ummmm....1996 or 1997. I went to H&R Block this year. I just don't need the hassle, and I saved $38 on the software. Good luck with that new, customer-screwing business model, TurboTax!

Posted by: Rick Hoppe | Jan 14, 2015 7:12:52 AM

Just look at the comments on Amazon about this. The consensus of opinion is to switch H&R Block. Intuit really shot itself in the foot here. People will not get over this easily.

Posted by: Rick Caird | Jan 14, 2015 6:57:54 AM

I've been using TurboTax for over 20 years. It does OK. There are a lot of problems with it and I often have to go into the "Forms" view to manually override the entries that TurboTax had put there (Form 1116 is a noted screw-up). I've written to them about the bugs that I find, and nothing ever happens.

Sadly, I kinda feel as though I'm hooked. As my taxes got more complicated, I learned to handle them through TurboTax, and I know how to dig around in the software. I don't really want to start over and have to learn a new program, so I bear up and soldier on. As I said, it does OK; but if you know anything about taxes, you'll easily find holes all over the software.

Posted by: Steve S. | Jan 14, 2015 6:42:33 AM

OK. H&R Block.

Posted by: Frank | Jan 14, 2015 6:37:59 AM

The tax system is so complex that the IRS should give this stuff away

Posted by: Neo | Jan 14, 2015 6:10:31 AM

Intuit has forgotten the lesson it learned 12 years ago after it stealthily foisted C-Dilla "activation" software on TurboTax users, software that remained on the PC after TurboTax was uninstalled. TaxCut sales surged that year too.

Intuit needed to change the product name from Deluxe to Plus or something, so as to put repeat customers on notice that the features were very different this year. Intuit's greed blinded them.

Intuit's culture appears to include very little respect for customers. Yes, they now offer free upgrades to customers who complain, at least this year. Nevertheless customers are likely to remember this deception for several years.

Posted by: AMTbuff | Jan 14, 2015 5:17:57 AM