Intuit trying to stymie a free alternative to TurboTax?

Conflict continues between advocates of a free tax filing system for Americans and the supporters of Intuit (INTU), maker of the popular tax software TurboTax.

As described last year by non-profit investigative journalism group ProPublica, "return-free filing" is a voluntary way for tax payers to file their returns without having to hire a tax preparer or purchase commercial tax software. Such systems already exist in several European nations, and in the U.S. there's a program called "Free File" that's been available for over a decade now. It's a partnership between the Internal Revenue Service and software companies that makes "free tax preparation software and free e-file available to most individual tax payers."

But according to a Treasury Department audit, only around 3 million people used Free File in 2012, compared to the 25 million or so who reportedly used TurboTax that same year.

For its part, Intuit says it supports the Free File program and has donated more than 22 million federal and state tax returns to low and middle-income taxpayers through TurboTax. But it criticizes the return-free model, which Intuit spokeswoman Julie Miller says "minimizes the taxpayers' voice and instead maximizes revenue collection for government. That kind of anti-consumer policy does not advance taxpayer rights, citizen empowerment or real simplification of the tax code."

ProPublica, meanwhile, says Intuit has mounted a major lobbying effort on Capitol Hill to check the adoption return-free filing. The company noted in a 2012 lobbying disclosure that it opposes IRS government tax preparation.

ProPublica on Monday reported that Intuit is linked to a "grassroots" campaign against return-free filing, a campaign the media firm says used form letters and opinion pieces "from lobbyists and public relations professionals with connections to the Computer & Communications Industry Association, a trade group that counts Intuit... among its members."

In an emailed statement, Intuit's Miller said her company works with many industry groups, as well as community service organizations, taxpayer advocacy groups and others, "to support common-sense tax reform and taxpayer empowerment for the average American."

"We feel all points of view deserve to be heard on issues so important to taxpayer rights," she concluded, "including those of groups and media advocacy organizations who disagree."

Among those who disagree is William Gale, co-director of the Urban-Brookings Tax Policy Center. Return-free filling, he told ProPublica last year, "is not some pie-in-the-sky that's never been done before. It's doable, feasible, implementable, and at a relatively low cost."

  • Bruce Kennedy

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