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posted by martyb on Wednesday July 17 2019, @08:55PM   Printer-friendly
from the making-money dept.

Trump’s Tax Law Threatened TurboTax’s Profits. So the Company Started Charging the Disabled, the Unemployed and Students.

The 2017 tax overhaul vastly expanded the number of people who could file simplified tax returns, a boon to millions of Americans.

But the new law directly threatened the lucrative business of Intuit, the maker of TurboTax.

Although the company draws in customers with the promise of a "free" product, its fortunes depend on getting as many customers as possible to pay. It had been regularly charging $100 or more for returns that included itemized deductions for mortgage interest and charitable donations. Under the new law, many wealthier taxpayers would no longer be filing that form, qualifying them to use the company's free software.

Intuit executives came up with a way to preserve the company's hefty profit margins: It began charging more low-income people. Which ones? Individuals with disabilities, the unemployed and people who owe money on student loans, all of whom use tax forms that TurboTax previously included for free.


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  • (Score: 4, Touché) by ikanreed on Thursday July 18 2019, @02:44AM (3 children)

    by ikanreed (3164) Subscriber Badge on Thursday July 18 2019, @02:44AM (#868335) Journal

    The IRS shouldn't be in the business of processing returns?

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  • (Score: 1) by khallow on Thursday July 18 2019, @11:11AM (2 children)

    by khallow (3766) Subscriber Badge on Thursday July 18 2019, @11:11AM (#868442) Journal

    The IRS shouldn't be in the business of processing returns?

    My point here is that the IRS can't simultaneously maximize government revenue and minimize the taxes you pay. My take is that when push comes to shove, processing returns to maximize tax revenue is going to be a higher priority for them than the best interests of the taxpayers will be. That's why it's a conflict of interest and why I think the conflict of interest will be resolved to harm tens of millions of people.

    • (Score: 0) by Anonymous Coward on Thursday July 18 2019, @10:23PM (1 child)

      by Anonymous Coward on Thursday July 18 2019, @10:23PM (#868716)

      Almost no one calculates their own taxes anymore. You take your tax form, copy numbers from one box to another, add here, multiply there, and it spits a number out at the end (or pay someone else to do it for you). And then, when you are all done the IRS gets to tell you if you did it correctly or not. So, why not just have the IRS present you with the numbers (that they already have most of BTW), ask a few questions and adjustments, and do the calculations for you? Either way, the final calculated result is the same, as the IRS is still free to challenge the data you provide, but I didn't have to pay someone else to do if for me or whip out the calculator.

      Hell, it would probably result in less revenue, as you would know in advance what information the IRS has on you. This would allow you challenge that data when it hurts you and not volunteer it when it helps you.

      • (Score: 1) by khallow on Thursday July 18 2019, @11:08PM

        by khallow (3766) Subscriber Badge on Thursday July 18 2019, @11:08PM (#868733) Journal

        So, why not just have the IRS present you with the numbers (that they already have most of BTW), ask a few questions and adjustments, and do the calculations for you?

        I already explained why. The IRS can raise more revenue by presenting you with larger numbers. The private tax filers can't. Sooner or later, someone is going to play that game.

        Either way, the final calculated result is the same

        Except when it's not, because the IRS needed to make more revenue and thus, calculated larger tax numbers. Meanwhile those tax filers still get more money by lowering the tax load.

        Hell, it would probably result in less revenue, as you would know in advance what information the IRS has on you. This would allow you challenge that data when it hurts you and not volunteer it when it helps you.

        Conversely, this provides a convenient bit of machinery for the IRS to demand more information from you. You do want that tax refund, right?