If you can’t find something on Google, does it even exist? When it comes to free tax-filing offerings, at least, TurboTax maker Intuit sure as hell seems to hope you think the answer is no.
The Internal Revenue Service has had a long-held agreement with a dozen or so tax-preparation companies: They’ll help the 70 percent of Americans earning the least amount of money prepare and file their taxes for free and in exchange, the IRS won’t put them out of business by giving everyone access to a free alternative instead. It’s far from perfect. However, this arrangement has kept tens of thousands of employees at companies like Liberty Tax and H&R Block, whose ranks swell considerably during tax season, from losing their jobs.
This year, only taxpayers who earned over $66,000 had to pay to use these companies’ software, the theory here being that those people can probably afford the $60-$120 charge. At least for anyone who owns stock in tax-prep software, it’s a pretty sweet deal. People will always have to pay taxes, almost no one enjoys doing their taxes by hand, and with the Free File program in effect, this entire mini-industry of companies won’t simply vanishing overnight.
But despite the reprieve offered by the program, at least one tax-prep company figured it could still trick low-income taxpayers into coughing up some cash. And according to ProPublica, it did so with intentionally misleading advertisements and by trying to make its Free File page more difficult for taxpayers to locate online.
In an article Friday, ProPublica reported that Intuit had added code to its website telling Google and other search engines not to list TurboTax’s Free File page in any search results.
Specifically, Intuit added a custom /Robots.txt file to its website. The text in robot files contains instructions for web crawlers that, in TurboTax’s case, told search engines not to include the Free File page in search results (“noindex”) and, also, not to follow any links on the page (“nofollow”).
Intuit did not respond to a request for comment. At the time of writing, the company hadn’t responded to ProPublica either. [Update: Statement from Intuit added below.]
The news comes just four days after ProPublica reported that Intuit had placed deceptive ads on Google offering “free” IRS filings. While the TurboTax ad promised to help users “finish and file today” using its “free edition,” users who clicked on the ads were eventually asked to make a payment. In one scenario, ProPublica created a profile for a house cleaner making $29,000. By the time the journalists worked their way through TurboTax’s tax-prep questionnaire, the software was requesting a payment of $119.99.
These kinds of tactics couldn’t come at a worse time. There’s a bipartisan effort currently underway in Congress, known as Taxpayer First Act, to make the Free File program permanent. The legislation—which also places new restrictions on private debt collectors, among numerous other benefits for low-income Americans—has faced some criticism from left-wing of the Democratic party, members of whom believe the IRS should, for the most part, just do the math for itself.
As Gizmodo’s Victoria Song recently wrote, that’s pretty much how things work in Japan:
My first paying job was in Japan, which employs a withholding tax system. If you’re gainfully employed, your company just deducts however much you’re supposed to pay and files for you. In fact, most people get a postcard from the Japanese equivalent of the IRS in spring that shows them how much they earned, how much they owe, and how much was withheld. Any adjustments just automatically show up in your paystub at the end of the fiscal year. It took a minute and a calculator to check the government math, and in the three years I earned a salary in Tokyo, it was never wrong. Sure, I griped about having to pay taxes, but the actual process was seamless.
Under this return-free filing system, Americans who are planning to take standard deductions anyway would just need to verify the IRS’s figures. If they’re happy with what they see, they can move on with their lives. No further action is required.
This system would never fly here, of course, because there’s an entire industry with an army of lobbyists who’ll oppose it at every turn. There are plenty of politicians and pundits, too, happy to accept contributions from tax-prep companies in exchange for holding up the Free File program as the best solution America can ever hope to achieve. Anti-tax activists, such as Grover Norquist of Americans for Tax Reform, for instance, have labeled return-free filing an attempt to “socialize all tax preparation in America,” while warning, without explanation, that it would lead the IRS to deliberately overcharge folks and withhold information from them.
Senator Ron Wyden, who previously introduced a bill that included return-free filing and now supports the Taxpayer First Act, called TurboTax’s efforts to reduce access to the Free File program “outrageous,” and told ProPublica that he would be raising the matter with the IRS.
“The IRS agreement with the tax-preparation software industry requires companies to work to increase the number of taxpayers who file their taxes for free,” he said. “Steering eligible taxpayers away from filing for free or blocking the Free File page from search results violates the spirit of the agreement and calls into serious question the justification for the program.”
Update, 6:25 pm: In a statement to Gizmodo, Intuit said it was initiating a thorough review of its search practices with the aim of increasing its customers’ awareness of the Free File service and how to access it. The company said that while it had promoted its Free File program through original content and Q&A pages, “we recognize that our overall search approach may have made it harder for some customers to find a TurboTax Free File Program landing page.
“TurboTax offers two free tax filing products: TurboTax Free Edition and TurboTax Free File Program, which is part of IRS Free File. Our intent in implementing our search practices was to make clear the distinction between these products by educating customers so they could find the product they were looking for,” the company said.
Intuit also said that it donated 1.2 million tax returns free of charge this year; 39 million over the last two decades, as well as 17 million state return filings.