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Senator Warren Claims TurboTax 'Relentlessly' Upsells Customers in Letter To FTC (theverge.com) 93

Senator Elizabeth Warren (D-MA) has written a letter to the Federal Trade Commission, saying that TurboTax "continues to relentlessly upsell" customers while also directing them away from services that would otherwise be free. From a report: As noted in the letter, Warren's staff analyzed TurboTax's services using a sample taxpayer and found that the company attempted to upsell the customer eight times during the tax filing process. Warren writes that in "several cases," these solicitations "appear to be efforts to mislead customers into thinking that they must pay the extra fees in order to file their taxes when that is not the case." Some show up as full-screen prompts, forcing users to scroll to the bottom to deny the upgrade.

In one instance, Warren's team found that TurboTax highlighted its $89 tax filing package as "the right option" for their sample taxpayer, leaving the free option at the bottom of the page. After choosing just one upgrade, Warren's staff found that their sample taxpayer with "simple" filing requirements had to pay an extra $69 to report her unemployment income and educator expenses, plus $64 to file Massachusetts state tax returns. That makes for a grand total of $133 -- a sum people wouldn't have to pay through the IRS's free Direct File service, Warren argues.

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Senator Warren Claims TurboTax 'Relentlessly' Upsells Customers in Letter To FTC

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  • Trick question! Their system is down, so you can't file using them even after paying for it.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      Trick question! Their system is down, so you can't file using them even after paying for it.

      No wait. Say you're an American overseas. Which HR Block do you use? This one [hrblock.com] or this one [hrblock.com]? If you think that's an easy answer, how come both give different results? Seriously, I can vouch this is true based on my return last year -- the difference was about $500.

  • It does. (Score:4, Interesting)

    by mjperson ( 160131 ) <mjperson@mit.edu> on Monday April 15, 2024 @11:55AM (#64395762)

    I use TurboTax for various reasons. The amount of upselling is pretty fierce. Her pointing out obvious reality doesn't seem like it should be controversial.

    • Re: (Score:3, Informative)

      by echo123 ( 1266692 )

      This video does a great job explaining how inefficient and costly our tax system is compared to advanced countries.

      https://www.nytimes.com/video/... [nytimes.com]

      • This video does a great job explaining how inefficient and costly our tax system is compared to advanced countries.

        https://www.nytimes.com/video/... [nytimes.com]

        I don't need to watch that. Let me bottom line it for you.

        If the United States continues as a democracy, the tax system will never change. It's simply not possible in our current state of democracy to make major changes like revamping the tax system.

        If the United States turns into a Republican Party led single party dictatorship, then it's possible depending on who is running things that the tax system will go away completely, perhaps change to a flat tax system, or make whatever changes the

    • by ickpoo ( 454860 )

      Completed my taxes a couple of days ago with TurboTax. She is absolutely right that it is deceptive. It is unclear what particular product you are using, and it appears impossible to do anything other than move to a more expensive version.

      That said,, Turbo tax is so damn slow - why does each item of information need its own screen? And why does it need to spin and animate stuff as I move from one screen to another? Terrible, and its nagging about me setting my farm income to 0 (I don't have a farm, henc

  • by Hoi Polloi ( 522990 ) on Monday April 15, 2024 @11:56AM (#64395766) Journal

    Reminds me of the DMV (dept of motor vehicles) sites that I kept getting when I was searching for the real state DMV. They were offering a service that was basically them doing what was already free. The site was so sneakily named and designed that I was a totally confused and about to enter my info before I dug in more deeply and realized the scam.

    • by mjwx ( 966435 )

      Reminds me of the DMV (dept of motor vehicles) sites that I kept getting when I was searching for the real state DMV. They were offering a service that was basically them doing what was already free. The site was so sneakily named and designed that I was a totally confused and about to enter my info before I dug in more deeply and realized the scam.

      Same with non-Americans filling out an ESTA (Electronic System for Travel Authorisation) to travel to the US, loads of dodgy sites that charge you extra just to be a middleman by passing the details from their website to the official one (the official site was $14 last time I did one). It doesn't help that the legit site is cbp.dhs.gov which looks a bit dodgy to begin with. Fortunately Google is pretty good at filtering the dodgy ones out when searching for ESTA, at least if you've an adblocker installed.

  • Last year when I did my taxes through TurboTax, it started as one price, like $59 or something. Then after painfully taking an hour or so on their annoying website that makes the most basic tax returns take 10x longer than they should, the price somehow jumped to over $100 out of thin air. Dropped them this year and used Free Fillable Forms.

    I had to log back in unfortunately to access last years return. When I finally found the link to download it (I think I had to "start" my return before I had access
    • I swapped to H&R awhile back when TurboTax did the lame move to make home mortgage deductions be a part of the ultra super premium deluxe edition. They apologized but no going back. H&R feels better, but at times it just won't do the calculation and I have to do something by hand.

      Also, I download and do it on the computer, and save the returns on the computer, so that next year it's a simple import of a local file.

  • Absolutely true. (Score:4, Insightful)

    by Shag ( 3737 ) on Monday April 15, 2024 @12:16PM (#64395806) Journal

    I just did my taxes with TurboTax - had tried TaxSlayer which has more free/cheap offerings (I use it for my mom-in-law's taxes) but didn't have the payment option I was looking for. Not only does TurboTax keep trying to upsell, it also keeps asking for permission to share my data with world+dog. And if I revisit a section (income or whatever) it asks the same upsell questions again that it asked the first time I went into that section.

    I have kids. I don't need anyone else to beg me repeatedly for things.

  • Isn't it an obvious *fact*? Shouldn't that be "Warren attacks"?

  • how about stop making people pay taxes or at least make it so that you dont require a PhD to file taxes.

    • how about stop making people pay taxes or at least make it so that you dont require a PhD to file taxes.

      That's the obvious solution... simplify taxes to the point we don't have to write a 200 page novel in order to complete the task. However, if you think companies like H&R Block, Intuit (TurboTax), Jackson-Hewitt, and others are going to go down without a fight, guess again. These tax preparation companies and services are heavily invested in having as complex a set of rules and regulations as possible so that they can make their money. Eliminate this need by repealing the Federal Income Tax and using

      • the complex rules have zero to do with software makers, that is U.S. congress and Dept of Revenue

        • the complex rules have zero to do with software makers, that is U.S. congress and Dept of Revenue

          The rules themselves may not... but simplifying things and not having to do 200 page novels in order to file your taxes does. The software makers and tax preparation companies have built an industry around this... if you simplify the rules, the industry is no longer needed... which means those companies go away... so Block, Intuit, Jackson-Hewitt, et al, will do their level best to lobby Congress to NOT simplify the rules.

          • The software is cheap, essentially zero. I'm thinking $20 for tax software is expensive to someone who mashes burgers for a living; they can do their 1040-EZ without software anyway, meanwhile I have long lists of trades and such to import.

            Not really seeing the problem with the software companies since the complex IRS rules predate them.

             

            • Not really seeing the problem with the software companies since the complex IRS rules predate them.

              So you are saying you do not understand that the software companies and the tax preparation companies will be lobbying Congress to keep the tax rules as complex as possible so they can keep their fiefdom of tax preparation and deciphering all of these complex laws and regulations.

              • The rules were complex as possible before software existed. *yawn*

                $20 is essentially zero for me and anyone with a real job

                • The rules were complex as possible before software existed. *yawn*

                  Put the events in order:

                  1. 1. Congress creates complex tax rules
                  2. 2. Companies like H&R Block and Jackson-Hewitt form to deal with it for people when the forms were manual
                  3. 3. PCs become far more commonplace
                  4. 4. Companies like H&R Block and Intuit create tax preparation software

                  Now what happens if you simplify the tax rules (take away the first item)? No more need for Block, a subset of Intuit, etc. The house of cards falls. This is why they will lobby Congress to keep things that way because complex tax

      • Re:easily solution (Score:4, Insightful)

        by Darinbob ( 1142669 ) on Monday April 15, 2024 @02:53PM (#64396254)

        "Flat Tax" does nothing to simplify taxes. Figuring out the tax rate is the simplest part of the process. Look up AGI on a table and there's your percentage. The flat tax is a ruse to help out the wealthy by claiming that it makes tax filing simpler. The tax prep software already severely hurt the manual tax prep industry, it's so much cheaper than going to an accountant or a professional tax prep company, but the tax prep software makes so much money for this that they also want to keep the complexity.

        Now, flat tax hurts other things - long term capital gains. These are vital to encourage long term investments, especially in an era when so many companies are hyper focused on quarterly earnings. Buy and hold is better for the economy than churn. And long term investments are no longer just tools for the ultra wealthy, almost everyone has their retirement tied up in long term capital, even if it's hidden behind a pension or 401K.

        • "Flat Tax" does nothing to simplify taxes. Figuring out the tax rate is the simplest part of the process. Look up AGI on a table and there's your percentage.

          Sure it does. A flat tax would apply the same percentage across everything and eliminate the need for calculating your AGI... which is the worst part of this entire process. Generally speaking, I would prefer FairTax over a flat tax.

        • Flat Tax enthusiasts fail to understand the concept of the marginal value of a dollar. $1000 is a huge amount to someone living on minimum wage. It's a moderate amount for a middle class person, and absolutely nothing to a billionaire. Taxing the three groups the same rate is punitive to people who are already doing the worse.
          • Flat Tax enthusiasts fail to understand the concept of the marginal value of a dollar.

            No they don't

            $1000 is a huge amount to someone living on minimum wage. It's a moderate amount for a middle class person, and absolutely nothing to a billionaire. Taxing the three groups the same rate is punitive to people who are already doing the worse.

            That's why the Fairtax (the most often cited flat tax proposal) has a prebate. It addresses the issue of regressive taxation. Although not perfect (since the prebate a

    • The IRS already has our info from employers and financial institutions. At the end of Jan when we normally get W2's etc mailed the IRS should just mail everyone a slip. Something along the lines of based on the info we have this is your return/what you owe. If you agree collect your return or send what you owe. If you disagree please submit supporting documentation.
  • by Cinder6 ( 894572 ) on Monday April 15, 2024 @01:05PM (#64395936)

    I disagree with her on probably most things, but she's right on this. TurboTax is aggressive, and you could make an argument for predatory.

    Others correctly point out that people are free to use something else, but I question how much that matters. Fact is, TurboTax is the most popular service, commanding 73% market share in 2021 [secondmeasure.com]. When a company becomes that dominant, I think it's worth looking into their practices to make sure they're above-board.

    That all said, I will probably disagree with her over what regulation, if any, should be done. I think the IRS should absolutely have its own system, and it's bonkers it's taken so long just to get a pilot program going (and one that can't even cover everyone in the states in which it's available). Better education of the public on available services would also help. TurboTax should be allowed to upsell and offer premium services, but they should be prevented from using any dark patterns.

    • I would add that its a travesty that legislators on both sides of the aisle have created the cluster-mess that is taxation in this country. There are thousands of carve outs, big and small. Most for seemingly good intentions, but add up to a absolute nightmare. It is telling that neither party feels moved to fix any of it. Rather both find it just great to add their special interest to the pile. Then bark about issues on the periphery, like is the IRS hassling this group or that group this month. Th

    • The old adage even a broken clock is right twice a day.
  • Warren wrote a letter to the FTC – but she should have written a letter to Education Department demanding to know how anybody could get through a US elementary school education without knowing how to easily recognize and effortlessly deal with a-hole high pressure sales marketers.

  • I had a similar issue. I'm very familiar with TurboTax SW so buying it was a better option than learning the free options. I have several additional schedules. However, I mistakenly bought the full biz package, but was trying to buy the Personal and Small Biz package I normally used. There little questionnaire tricked me into buying that more expensive package, but I immediately realized it wasn't what I wanted because the full biz package doesn't even include personal tax retrun. Trying to return the
    • I've used FreeTaxUSA for two years. Even with a Schedule C and state filing, I only paid $14.99. People are going to think I'm a paid shill because I've commented multiple times on this article but I'm just really happy. It gave me equal results to $100+ filing with another option. They'll even let you download the 1040 and worksheet forms while you work and even before paying so you can double check everything.

      • by wiggles ( 30088 )

        You paid $14.99 too much. You should not have to pay a dime for the privilege of giving the government your money. They purposely keep the tax code so complex and so difficult to navigate just to appease Intuit lobbyists, while billionaires don't pay jack shit because they're just taking out loans on assets instead of earning income like the rest of us.

        Replace the whole damn thing with a 30% sales tax coupled with social safety net handouts for the low earners and abolish the IRS.

        • Oh I could have done it for free for federal. State, I would have to copy the numbers from the generated forms to make that free.

          Whatever things should be at the government level, this company is still doing alright.

  • See subject. OLT would have processed and filed that for free.

  • JUST SIGN A LAW CREATING NATIONAL ONLINE TAX SYSTEM. It's that damn easy!! I'm sick of this crap with TT and others. Solve the damn problem we elected you people to do instead of taking bribes from TT.
    • They literally just did that [slashdot.org].

      • Sort of... "and was restricted to taxpayers in 12 states, with only four types of income (wages, interest, Social Security and unemployment).". Not exactly an open system for the public. Until it's rolled out to everyone (which even the article seems suspect of that happening), I stand by my comment.
  • The boot sector virus installed by TurboTax years back (mentioned first here [slashdot.org]) persisted until it eventually derailed a forced upgrade from Windows 7, rendering her computer unbootable. This was finally the last straw for her, and as a proof-of-concept, I was allowed to install Linux on the machine so she could launch the old Windows install from a VM and finish her taxes. Years later she now recognizes Linux as inherently superior and no longer uses Windows or TurboTax! Thanks TurboTax!

  • umm, if you have a simple enough tax return (most of us do), you can get free federal and $14.99 per state with freetaxusa. A simple search on DDG for "free file tax service" finds them.

    Sorry if people aren't TRYING!!!

  • Then, you wouldn't need computer assistance to figure out how to file your taxes semi-correctly.
  • The difference between Turbotax and the gubment is that Turbotax will respond to pressure from customers.

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