TurboTax is Sending Checks To 4.4 Million Customers as Part of a $141 Million Settlement (cnn.com) 48
Roughly 4.4 million people will soon receive checks from TurboTax, following a 50-state settlement with parent company Intuit for allegedly steering millions of low-income Americans away from free tax-filing services. From a report: Customers affected by the settlement will receive an email about the settlement and checks will automatically be mailed throughout this month. Most customers will get about $30, with some customers that used TurboTax for three consecutive years getting up to $85. A website has also been set up for more information. "TurboTax's predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal duties to file their taxes," said New York Attorney General Letitia James in a press release. "Today we are righting that wrong and putting money back into the pockets of hardworking taxpayers who should have never paid to file their taxes." She announced the settlement last year, saying that Intuit "unfairly charged" people and forced the company to stop its "free, free, free" ad campaign because it falsely lured customers with the promise of free tax preparation services.
A real message should have been sent (Score:5, Insightful)
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Howabout we do one better and let the Fed deploy a means to easily fill out basic tax forms?
They did this, except with a twist to help big business. You get to file your taxes for free, but the tax businesses get to host the forms. While they're you can offer upcharge services for a price. But TurboTax went one step further and confused the users into thinking that they had to pay when they were eligible for free filing. Then they end up paying a tiny class action settlement amounting to $3 for each affected person except the lawyers get most of that. They still come out way ahead.
Also, there
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They did this, except with a twist to help big business. You get to file your taxes for free, but the tax businesses get to host the forms.
Anybody who paid attention saw what TurboTax did coming from MILES away. It was a stupid plan that should have never happened. The Fed could have developed and released a replacement for peanuts, but "chose" not to because their "donors" wouldn't allow it.
It's the mess of tax laws that make filling it out require so much effort.
Absolutely agree.
Also Receiving Checks from TurboTax - Politicians (Score:5, Insightful)
The fact that we all pay $200+ just to pay our taxes when the government already knows or should know exactly what we owe is proof that our political system is purely run by bribery.
These scoundrels bribe our congressmen and Senators every single year while they rob the whole country blind.
Then just file 1040 Easy. (Score:1)
Pay the full tax amount without any deductions and be done with it in 10 minutes.
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Why even have a standard deduction?
It's a shame we never got the Flat Tax. It would have elimated a lot of complications with the tax laws.
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Why even have a standard deduction?
Because I have empathy for people that can barely put bread on the table. If you really want people barely making wages you can't live on to "pay their share", fine, make the first 50k taxed at 1%.
It's a shame we never got the Flat Tax.
I'd have to see numbers on that before I can pass comment. I've never put any brainpower towards it.
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I meant, since we have a progressive tax system, why not just reduce the tax amount for the first 50K
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With 165 million returns submitted in 2022, surveys showing only 25% of people file for free, and average cost to file a return sitting at around $200, US taxpayers are paying about $25 billion per year for a mostly unnecessary service. Every tax form sent to me from my company, mortgage servicer, investment accounts, etc. are also sent to the government. 87% of people take the standard deduction. Most people don't have complicated tax situations, and the government could figure out their bill fine on its o
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The form would also have to include a statement of unreported income such as tips, private party sales of assets (such as cars or a watch for which there was a capital gain), and compensation for casual labor that is often not reported (such as when a neighbor pays you to help paint their house).
These statements would have to be under penalty of perjury and misstatements would have to be subject to criminal charges as they are today. Hence I think the mechanism would require everyone to actually "file" some
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The form would also have to include a statement of unreported income such as tips, private party sales of assets (such as cars or a watch for which there was a capital gain), and compensation for casual labor that is often not reported (such as when a neighbor pays you to help paint their house).
Or just eliminate all that other bullshit. Nobody (including the government) is getting rich with the $500 I made by selling my car. If you really want to keep it, make the number stupidly high so that will very rarely affect a "normal person" like 99% of the country. "Did you make more than $50,000 in unreported income last year?" seems like it would work.
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Some people receive much of their income from unreported sources. Why should they get a free ride?
We should get rid of the income tax completely and replace it with a national VAT tax which is harder to evade and is fair -- the more you consume, the more you are likely receiving in value from society so perhaps you should pay more in taxes.
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Some people receive much of their income from unreported sources. Why should they get a free ride?
Because, if I had to guess, the number of people that do that is so statistically insignificant that's it not even worth talking about. If it really bothers you, make the number $10k. (Eliminating the absurd practice of tipping in the US would go a long way to eliminate that loophole too.)
We should get rid of the income tax completely and replace it with a national VAT tax
I'm on board with that.
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Yes, the most widespread source of unreported income that is a substantial portion of one's income is probably via tips and, yes, that's a result of the ridiculous (and ever expanding it seems) tipping culture in the US coupled with the ridiculous "tipped minimum wage" in at least some states being much, much lower than the "normal" minimum wage with (supposedly) the employer responsible for making up the difference iff an employee's tips don't suffice.
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That average cost is that high because so many people pay a fee to get their money upfront rather than waiting for the IRS to process the claim.
Basically, they are paying for a secured loan.
Re:Also Receiving Checks from TurboTax - Politicia (Score:5, Interesting)
Democrats have pushed a bill that would update the IRS so everyone would just file directly through them, for free. It would mean TurboTax, H&R Block, Liberty Tax,TaxAct, Tax Slayer, and others would largely not be needed (they may still be of benefit to those with complicated tax situations but generally folks are just going to hire a CPA to do that). The GOP knocked it down because there's tons of lobby money thrown at them from the tax companies.
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Indeed - this should have been passed into law decades ago.
Even modestly complicated returns requiring little "creative interpretation" of tax law should be able to be filed online for free using IRS provided software/web service.
I don't expect the IRS software to give tax advice or even much in the way of suggestions or fancy "interview" modes -- just fill in the forms and let Intel, AMD, ARM etc do the arithmetic to fill in all those "Enter the lesser of Box 9C and 15A unless Box 27L is greater than Box 4
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just fill in the forms and let Intel, AMD, ARM etc do the arithmetic to fill in all those "Enter the lesser of Box 9C and 15A unless Box 27L is greater than Box 4 from Form 1234 in which case multiply the value in Box 2 from Form 1234 by 0.3 and enter that" boxes.
I'm not a stupid person. I have a reasonable reading, writing, mathematical, logical, and technical aptitude. I carry an Engineering Technology degree, and have a 10+ year career working with financial/operational software. I still have absolutely zero confidence that I would be able to fill out a proper tax form by hand, even if all the magical arithmetic was done automatically.
The long and short of it is that our tax code is fucked. It is FAR more complicated than it needs to be for 90+ percent of the po
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If you are as accomplished as you assert in the fields you are in then you must have a fairly complex tax situation - perhaps in the top 5% of personal income taxes.
Most people don't have to deal with writing off their race horse hobby^H^H^H^H^H investment very carefully or managing their oil depletion allowance to stay within complex tax laws.
I've got no financial training and never was much of a "math person" (not bad at it, just not drawn to it) and got my BSc and MSc in computer science/engineering ~40
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Obviously not going to share what I make, it's not in the top 5%, and my situation is pretty typical of middle class. I own a home, and have an incredibly small "side business" in addition to my 9 to 5. (idk how typical the "side business" is, it's barely enough to register, but still needs to be accounted for.) In my personal opinion, tax prep in the current system is just a different sort of technical skill that I don't possess. If I'm being perfectly honest I could probably handle getting everything fil
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The Grover Norquist pledge also prevents Republicans from supporting easier taxes.
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The fact that we all pay $200+ just to pay our taxes when the government already knows or should know exactly what we owe is proof that our political system is purely run by bribery.
Who's "we"? I'm a poor so my taxes are trivially performed in a few minutes on OLT.com. They file both my US and CA taxes for me, and I get email notifications when each are submitted and accepted. Then checks show up and I photograph them through my bank's app. Total cost to me, $0 and however much of my PII every one of these servicers presumably collects and redistributes. They email me a small plain text ad once yearly.
There is talk now of the IRS actually putting up their own tax portal, which is presu
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Thanks for mentioning olt.com [olt.com]. I hadn't heard of them and have used Free File Fillable Forms [irs.gov] for a couple of years, the closest thing to an IRS-provided filing service I've found. It works but is kind of clunky.
I agree there are options for people who are willing to look for them, or take the time to fill out forms, but tax "preparation" and filing is still very predatory and intentionally obfuscated by Intuit and others. Plus people are told to be wary of providing their sensitive info to "sketchy" prod
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Yes, I had to read a whole bunch of articles before I would trust OLT because their website is so antiquated. But it does do the job I want it to do, and it does it fairly efficiently without any singing or dancing interface elements.
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The fact that we all pay $200+ just to pay our taxes when the government already knows or should know exactly what we owe is proof that our political system is purely run by bribery.
And how does the government know exactly how much we owe again? What is reported to the government is required information like standard salary (W-2) and interest income (INT-1099). What is not reported is a lot else like how much we spent on deductible expenses, charitable contributions, etc . Heaven forbid any of us have to do something like buy or sell a house or get married/divorced or have a child.
If your tax situation is simple, then your taxes should be simple. There are many people for which simple
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There are many people for which simple does not apply.
The big question is what proportion "many people" is. For example, the 2017 increase in the standard deduction [taxfoundation.org]:
reduced the number of taxpayers who needed to itemize their deductions from 46.5 million in 2017 to roughly 18 million in 2018. Following this simplification nearly 90 percent of all filers can use the standard deduction.
According to the article this change hasn't reduced charitable giving.
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The big question is what proportion "many people" is.
Just listing the 3 examples I listed:
A basic estimate of those three examples is 15M people. Of course there can be overlap with all three but those are just the first 3 common life events I could think of that changes tax structure enough to where taxes are not simple.
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Agree 100 with your comments. To take it another step, many of us live in states with their own complex tax rules. I'm in California. I take standard on federal but qualify for deductions in state. There are other differences too in what is taxable and deductible between state and federal - (property taxes, sales tax, state income tax as a line item on federal, dependents - e.g. I have 2 college age kids that get some support from me but not all, taxability of investments like gov't bonds, federal, municipa
Couldn't have happened to a nicer bunch. (Score:3, Informative)
Remember when these guys' software installed a boot sector virus that bricked your Windows install when Microsoft tried to force an upgrade?
A Buck Seventy (Score:1)
Assuming lawyers get half the settlement (the article doesn't say), that leaves $70.5M to go to the 4.4 million TurboTax customers. That amounts to about one dollar and seventy cents per customer. I'd call that a huge win for Intuit. Intuit's fine should have easily been three times the actual amount those 4.4M had to pay to use TurboTax. Anything else is condoning the behavior.
Re:A Buck Seventy (Score:5, Funny)
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Close, Quicken
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Unlikely... The Windows PC version of Quicken is so horribly slow it would still be calculating the result.
Therefore I'm going with the TurboTax theory!
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No, with a Pentium.
In reality, I was in a rush and didn't check my numbers. Oops.
Not a for-profit class-action lawsuit (Score:3)
As you could have seen by following any of the links in the article [agturbotaxsettlement.com].
This from the Common Questions area is particularly relevant:
Under the settlement, Intuit is required to pay $141 million. Nearly all of this money will be distributed to qualifying Intuit TurboTax customers.
I understand the generic cynicism, and agree the penalty should have been triple damages, but this is actually one of the good settlements.
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In OP's world, 16.022(72) = roughly 1.7
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Assuming lawyers get half the settlement (the article doesn't say
I thought the settlement was with all states not a consumer class action lawsuit. So technically everyone's tax dollars paid for the suit but the states are not taking a cut of the settlement money.
Settlement Website (Score:2)
TFS mentions a web site, but never lists it.
https://agturbotaxsettlement.c... [agturbotaxsettlement.com]
Who gets a refund? They already have a list. (Score:4, Informative)
Summary is unlcear on who gets a part of the settlement- and implies it's anyone who used TurboTax.
From official website:
The settlement applies to certain consumers who paid Intuit to file their federal tax returns through TurboTax for tax years 2016, 2017, and 2018 but were eligible to file for free through the IRS Free File Program. Consumers eligible for a payment will be notified by email by the settlement fund administrator. *These consumers will receive a payment automatically, without needing to file a claim.* Payments will be made by check, mailed throughout May 2023.
https://agturbotaxsettlement.c... [agturbotaxsettlement.com]
Re: Who gets a refund? They already have a list. (Score:2)
Settlement amount. (Score:2)
My wife got an email saying she was receiving between $20-30. She's used TurboTax for years, but I don't think she ever paid for the service, so I dont know if that means she'll get more or not, just that's what the email said..
How does the US version differ? (Score:2)
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I know with H&R block, if you don't click the free version or even try the upgraded version, it is impossible to downgrade.
I remember having to search for the free option (Score:2)
IIRC it was just like that for one year, but I can see how some might have just figured they had to pay, when in reality they didn't. I'm retired, fwiw, so that helped in qualifying.