In most countries, you don't have to pay an accountant to prepare your tax return: the government already knows how much you made, so every year they just send you a pre-filled in form to check over and sign.
In the USA, the highly concentrated tax-prep industry used its lobbying muscle to suppress the creation of a similar system, promising instead to offer free tax prep to millions of Americans through the IRS Free File system.
Then they lobbied to zero out the IRS's budget to advertise the existence of this program so no one knew about it. Then they deployed every dark UX pattern known to the internet to deceive people who were entitled to use Free File into using a paid tax-prep service instead.
But the hits keep on coming! Last year, Trump and the Republican legislature passed the #TaxScam, which gave away trillions to the richest people in America and did away with the need to itemize deductions for for mortgage interest and charitable donations if you're making more than $75k/year.
This presented a problem for Big Tax Prep. Services like Turbotax charged extra to complete the itemized deduction forms, pushing its most affluent customers out of the Free File and into its premium products. Now that these forms were no longer required for wealthy people, how could Turbotax and its ilk find customers for its premium product?
Simple: they moved the forms that students, poor people, elderly people and disabled people need to complete as part of their tax returns out of their Free File offerings. Now, if you paid student loan interest or if you're unemployed or hav ea disability, the forms you need to complete to file your taxes are only available through Turbotax's deluxe product.
Intuit, which makes Turbotax, denies any wrongdoing. Propublica recorded one of the company's customer service rep lying to a student who'd been trapped by the change about whether there had been a change at all.
When Intuit had cut the list of forms covered by TurboTax’s Free Edition in response to the Trump tax overhaul, it had removed Form 1098-E. The form is a statement prepared by companies that handle student loan payments. It shows how much interest the borrower paid that year. To file Obeng’s taxes, TurboTax would not even need the form itself, but it would list a single number, the amount of interest paid, on Schedule 1 of the main tax form, the 1040.That number, it turned out, would cost Obeng $60. Add TurboTax’s charge for state returns, and Obeng owed the company $111. On top of that, she was charged an additional $40 because she opted to pay the TurboTax fee out of her refund, rather than upfront. (If she had been able to file for free, there would have been no need to deduct any fees from her refund.)
In all, she ended up paying $151.
Although she didn’t realize it at the time, that $151 dwarfed the “tax break” TurboTax had prompted her to claim. The student loan interest deduction had only cut her taxes by $26.
Trump’s Tax Law Threatened TurboTax’s Profits. So the Company Started Charging the Disabled, the Unemployed and Students [Justin Elliott and Paul Kiel/Propublica]
