Quantcast
Connect with us

TurboTax CEO busted in leaked corporate video: Hiding free tax filing was in ‘best interest of taxpayers’

Published

on

Sasan Goodarzi, the CEO of Intuit, says the company’s efforts to make its free tax-filing software harder to find on Google were part of the software giant’s commitment to educating taxpayers.

In an 11-minute video sent to Intuit employees, Goodarzi said the company was trying to help consumers by steering them to “educational content” instead of TurboTax’s free filing website.

ADVERTISEMENT

The company promised the IRS it would offer a free option to tens of millions of taxpayers earning less than $34,000.

Responding to our reporting, which shows that Intuit, H&R Block and other for-profit tax software companies were steering low-income customers to their paid products, Goodarzi said the company’s marketing practices “had been misinterpreted to signal that we were trying to hide the product we offer in the IRS program. That is inaccurate.”

“Our choice around search was intended to be [in] the best interest of taxpayers so they were more fully informed about their options and could choose what they felt was best for them,” Goodarzi said in the video, which was marked “Intuit Confidential” and was sent to staff on May 3.

Goodarzi, who started as CEO in January, received $12.6 million in compensation last year as the head of the division that includes QuickBooks. He previously ran the company’s Consumer Tax Group, which includes TurboTax.

“We are and will always be a values-driven company,” Goodarzi said in the video obtained by ProPublica. “And chief among those values is integrity without compromise.”

ADVERTISEMENT

An Intuit spokesman said the video “is part of our commitment to an ongoing dialogue with our 9,000 employees and reflects our culture of transparency. We stand behind the video as a clear description of our actions as being both appropriate and consistent with our values.”

There’s a lot more to it, so we’ve provided more context below. (You can watch the full video here.)

ADVERTISEMENT

“Let me get into the important context about the environment in which these accusations are being made. At the center of it all is a single publication that has written 22 stories challenging our company over the last five years. Each of these articles have been written and published in the context of a specific wider political agenda. That agenda is to create a centralized government system of pre-filled tax returns.”

We looked around and couldn’t find other publications that have written as much on this topic, so we assume Goodarzi is referring to ProPublica. Yes, we have repeatedly written stories about the lobbying by companies like Intuit to stop the government from creating its own filing system. But we don’t have a political agenda, and passing laws is up to Congress. ProPublica does nonpartisan, independent investigative reporting that exposes abuses of power.

ADVERTISEMENT

“Over the past five years, tens of millions of consumers filed their taxes for free using one of our free offerings. That is more than every tax prep company combined.”

It’s not clear what backs up this statement. We asked the company for clarification, and it declined to explain it.

TurboTax controls more than half of the “do-it-yourself” tax-prep market. More consumers also paid for TurboTax than any other “do-it-yourself” tax-prep company. But only around 3% of eligible taxpayers have used IRS Free File over the life of the program, as ProPublica has previously reported, filing returns without paying a fee.

ADVERTISEMENT

“We created a holistic marketing approach including widely used search techniques to differentiate between our own free products and the one we offer through the Free File program. Knowledge is power and we wanted to equip taxpayers with the information they need to make an informed choice and more easily find the product they were looking for. As you know we advertise a lot. We’ve all seen them: “free free free.” Because we advertise so much, our experience and our common sense tells us that the majority of people doing internet searches for the words “TurboTax free tax preparation” are looking for TurboTax free product. Not the one we offer through the IRS Free File program.”

OK, this gets complicated. Goodarzi is differentiating between TurboTax’s Free Edition and its Free File product, which it offers as part of a deal with the IRS. As we have written, TurboTax directs people looking to file for free to the Free Edition, where many end up having to pay to file their returns. And we’ve heard from hundreds of people who were charged by TurboTax even though they were eligible to file for free. We asked the company for evidence to back up the claim that users don’t want to find the Free File product, but it didn’t respond.

“We implemented a multifaceted marketing campaign for the products we offer through the IRS Free File program. One important portion of the campaign was search and that included spending money on paid search and syndicating large amounts of content we created like product differences, eligibility requirements and FAQs. We did this so that the right content would be more easily found by eligible consumers. And that approach worked, with our IRS educational content showing up at the top of the search results. To avoid confusion between the IRS Free File program and our own free product, we also decided to have the landing page for the IRS product we offer not rank in search results.”

Here Goodarzi confirmed the accuracy of our story reporting that Intuit deliberately hid its Free File product from search engines.

ADVERTISEMENT

Intuit was doing two things on Google. First, it was buying ads to direct people who searched for the truly free version to products where they would eventually have to pay. Second, it suppressed the landing page of the truly free product so that it would never appear.

The Intuit video shows a Google search with a site answering frequently asked questions about the TurboTax Free File product at the top of the results. During tax season, we did a series of searches to try to find TurboTax’s Free File product. The FAQ page was never at the top of the results. We repeatedly found that TurboTax had purchased ads directing users away from their Free File product and to products where many users have to pay. An Intuit spokesman said the Google search results shown in the company’s video were from April 25, which was after the April 15 tax filing deadline.

Here’s our search on April 10. The ad and the top result both direct users to TurboTax’s commercial product, for which many people end up having to pay.

Here’s our search on April 15 for “TurboTax Freedom Free File.” The company uses Freedom as a brand name for its Free File product. Again, the top link in the search results directs users away from the truly free product.

ADVERTISEMENT

“Our choice around search was intended to be in the best interest of taxpayers so they were more fully informed about their options and could choose what they felt was best for them. But given the misinterpretation of our well intended actions, we decided to remove the limitations we put in place.”

After we revealed that Intuit had hidden its Free File product from search engines, the company changed its code. This was done after April 15, so it was too late for many people who could have filed for free.

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

 


Report typos and corrections to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

2020 Election

A Biden win will likely strip Mitch McConnell of all his power: CNN

Published

on

According to CNN polling analyst Harry Enten, should Joe Biden win the election on Nov. 3rd it will likely be part of a Democratic tidal wave that will also flip to the Senate to Democratic control -- and strip current Senate Majority Leader Mitch McConnell (R-KY) of his power.

Citing polls in which GOP incumbents are tied or trailing their Democratic opponents, Enten noted that Biden holds leads in those states and his popularity could sweep the down-ticket Democrats into the office too, handing Democrats control of the Senate to go along with the House where they are expected to remain in control.

Continue Reading

CNN

Trump defender buried on CNN for defending GOP push to seize Supreme Court seat

Published

on

On CNN Saturday, Democratic strategist Robert Zimmerman tore into GOP counterpart Alice Stewart for defending the GOP's Supreme Court power grab.

"I think it's important that [Republicans] proceed without delay on this," said Stewart. "They have the constitutional obligation to do so. And the Senate and in this administration. They also have historical precedent, given the timeline, this can be done. Many have been done in a much shorter time frame, as well as voters voted Republicans to control the Senate."

"I have to ask Alice, where was that constitutional obligation when President Obama nominated Merrick Garland?" said Zimmerman. "Of course the Republicans said it would be inappropriate, it was too close to a presidential election. Let's understand ... she is being chosen by Donald Trump and Mike Pence because they want to fill that Supreme Court, because they're going to be election challenges coming up and they want to make sure they have a vote that's going to rig the court in their favor."

Continue Reading
 

2020 Election

Colin Powell ally calls on House to begin ‘immediate’ impeachment hearings on Bill Barr

Published

on

Appearing on MSNBC on Saturday Morning with Ali Velshi, former Colin Powell chief of staff Lawrence Wilkerson said House Speaker Nancy Pelosi (D-CA) should immediately begin impeachment hearings against Attorney General Bill Barr.

After discussing Donald Trump's threat to not strep down peacefully should he lose in November, Wilkerson turned his ire on Barr who has been accused of acting like the president's personal attorney.

Addressing Trump's riling up his base with accusations of election theft, Wilkerson said, "This is a very, very dicey situation that he's creating, and I don't think he's smart enough to realize that he is creating it to the extent that he is."

Continue Reading
 
 
Democracy is in peril. Invest in progressive news. Join Raw Story Investigates for $1. Go ad-free. LEARN MORE