Virtually every rich country on Earth provides pre-completed tax-returns that you can either ignore (and pay an accountant or do your own taxes), or just sign and return: after all, the government already knows what you’re earning and how much tax you paid, so they can do all the heavy lifting for your annual return.
But when Congress tried to create a similar program in the USA, it faced a blizzard of lobbying from the tax-prep industry, led by Intuit, a tax-prep monopolist that grew to scale by buying or merging with its competitors — growth tactics that are illegal under US antitrust law, but have been permitted since Ronald Reagan gutted antitrust enforcement 40 years ago.
Under its weird, cultlike billionaire CEO Brad Smith (whose employees don t-shirts bearing his favorite aphorisms, like “Repetition doesn’t ruin the prayer”) Intuit led a coalition that created “Free File,” which would, in theory, allow 60% of Americans to file their taxes for free, using no-cost options offered by the tax-prep industry. But then the industry used “dark patterns” and out-and-out fraud to ensure that no one actually used the service, even as they stepped up their lobbying efforts, zeroing out the IRS’s budget for advertising Free File.
In a long, well-reported piece on Propublica, Justin Elliott and Paul Kiel lean on leaked Intuit documents to show exactly how crooked and corrupt the Intuit lobbying effort was, and how effective it was at ensuring that Americans — especially poor Americans — continued to funnel millions into his company’s coffers for use of its flagship Turbotax product, now with the help of former IRS employees who once ran Free File for the US government and now work to ensure that Americans continue to pay to use Turbo Tax.
Another important aspect of Intuit’s influence strategy during the Obama years was covertly enlisting minority and women’s groups to press its case.
The internal 2014-15 “encroachment strategy” document discloses plans to “leverage trade groups to support House/Senate Free File bills.” It goes on to list the groups Women Impacting Public Policy, The Latino Coalition and the National Black Chamber of Commerce.
Intuit has given money to all of those groups over the years. All have signed letters urging Congress to make the Free File deal permanent. “The Free File program has been a clear success,” said one letter signed by The Latino Coalition and the Hispanic Leadership Fund.
A spokesperson for Women Impacting Public Policy said it has received $70,000 from Intuit. The amounts given to the other groups are unknown, and they did not respond to requests for comment.
Company documents also outline plans to “mobilize” a “coalition” that included think tanks and academics, who published op-eds.
Will Marshall, president of the pro-business Progressive Policy Institute, opposed return-free filing in an op-ed in The Hill because doing one’s taxes is “a teachable moment [that] prompts us to review our financial circumstances.
Inside TurboTax’s 20-Year Fight to Stop Americans From Filing Their Taxes for Free [Justin Elliott and Paul Kiel/Propublica]
