TurboTax Found a Depraved Way to Bump Profits After Tax Filing Process Was Simplified

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In the aftermath of Trump’s major changes to the tax code, some of TurboTax’s customers no longer had to pay for many of its services, instead finding that the company’s free product would suffice. To offset this loss, the online tax service made changes that reportedly had an adverse impact on elderly, disabled, and unemployed taxpayers, as well as low-income households and people with student loans.

According to a report from ProPublica, Intuit—the company behind TurboTax—adjusted its system so that services that were formerly free would now cost taxpayers, and that this disproportionately impacted low-income and marginalized customers. Former employees told ProPublica that the change was designed so that people would believe they were filing for free, but would end up having to pay for additional forms and services.

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A former TurboTax employee told ProPublica that the income levels of those impacted by these changes “was never really considered.” Former employees also reportedly said that 30 percent of TurboTax customers who could use the free version of the product would have to upgrade to a paid version due to the company eliminating a number of free forms.

The forms that reportedly used to be free but now charge TurboTax customers include one for a tax credit for low-income taxpayers who are elderly or disabled, one for a retirement account for low and middle-income households, and one for unemployment benefits. And current and former students—including those with student loans—can no longer complete their tax filings without upgrading to a paid edition of the service.

So, the latest round of tax cuts overwhelmingly benefited the wealthy. The benefits for people who are not wealthy were negligible and TurboTax still apparently found a way to minimize those benefits further. And despite a reasonable expectation that TurboTax’s profits would take a hit with a simplified filing process, it actually showed a 12 percent increase in revenue last quarter, fueled, in part, by some pricing changes that disproportionately harm those who can afford it the least.

When asked for comment by Gizmodo, TurboTax would not answer direct questions as to whether or not it recently began charging for forms that apply to the elderly, disabled, or unemployed taxpayers. We’ve asked for further clarification and we’ll update this post when we receive a reply.

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This isn’t the first time the company has executed unethical practices to mislead poor taxpayers into paying for services they may not need—a ProPublica report from April found that Intuit added code to its website that directed search engines not to surface TurboTax’s Free File page.

It’s not particularly shocking that a company would want to come up with new strategies in light of a massive overhaul that impacts its bottom line, but that Intuit chose to dupe and take advantage of its most vulnerable customers is supremely shitty.

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Melanie Ehrenkranz

Reporter at Gizmodo

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