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.
(Score: 1) by khallow on Thursday July 18 2019, @11:08PM
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.
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.
Conversely, this provides a convenient bit of machinery for the IRS to demand more information from you. You do want that tax refund, right?