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Free Edition was a smash hit for Intuit and its pitch for “free” prep remains core to the company’s growth.
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But unlike the government program, this one comes with traps that can push customers lured with the promise of “free” into paying, some more than $200. Twelve years ago, Intuit launched its own “free” product: the similarly named “Free Edition” of TurboTax.
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As ProPublica has reported, Intuit added code to the Free File landing page of TurboTax that hid it from search engines like Google, making it harder for would-be users to find. Since Free File’s launch, Intuit has done everything it could to limit the program’s reach while making sure the government stuck to its end of the deal. In exchange, the IRS pledged not to create a government-run system. Under the terms of an agreement with the federal government, Intuit and other commercial tax prep companies promised to provide free online filing to tens of millions of lower-income taxpayers. The centerpiece of Intuit’s anti-encroachment strategy has been the Free File program, hatched 17 years ago in a moment of crisis for the company. “Buy ads for op-eds/editorials/stories in African American and Latino media,” one internal PowerPoint slide states. The company’s 2014-15 plan included manufacturing “3rd-party grass roots” support.
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“For a decade proposals have sought to create IRS tax software or a ReturnFree Tax System All were stopped,” reads a confidential 2007 PowerPoint presentation from an Intuit board of directors meeting. Internal presentations lay out company tactics for fighting “encroachment,” Intuit’s catchall term for any government initiative to make filing taxes easier - such as creating a free government filing system or pre-filling people’s returns with payroll or other data the IRS already has. Indeed, employees ruefully joke that the company’s motto should actually be “compromise without integrity.” From the beginning, Intuit recognized that its success depended on two parallel missions: stoking innovation in Silicon Valley while stifling it in Washington. The company unleashed a battalion of lobbyists and hired top officials from the agency that regulates it. government did what most wealthy countries did long ago and made tax filing simple and free for most citizens.įor more than 20 years, Intuit has waged a sophisticated, sometimes covert war to prevent the government from doing just that, according to internal company and IRS documents and interviews with insiders. taxpayers filed online and some 40 million of them did so with TurboTax, far more than with any other product.īut the success of TurboTax rests on a shaky foundation, one that could collapse overnight if the U.S. When Smith took over in 2008, TurboTax was a market leader, but only a small portion of Americans filed their taxes online. Intuit’s QuickBooks accounting product remains a steady moneymaker, but in the past two decades TurboTax, its tax preparation product, has driven the company’s steadily growing profits and made it a Wall Street phenom. The company stresses values above all, urging employees to “deliver awesome” and pursue “integrity without compromise.” Get Our Top InvestigationsĮmail address This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. In a recent Super Bowl ad, Intuit portrayed itself as a gentle robot that liberates small-business owners from paperwork. Over time, the company, like the other giants of Big Tech, cultivated an image of being not just good at what it did, but good, period. Intuit began in the 1980s as an accounting software company focused on helping people with their bookkeeping. The two posed for pictures, Simmons clad in black and the beaming CEO flashing the “rock on” hand sign. To Smith’s delight, his favorite rock star, Gene Simmons of Kiss, emerged. There, Smith arrived at his party in a DeLorean, and as he walked a red carpet, cheering employees waved “Brad is Rad” signs. Fittingly, the tour culminated in San Diego, the home of TurboTax, the software that transformed the company’s fortunes. In Ontario, employees wore T-shirts with Smith’s quasi-spiritual sayings: “Do whatever makes your heart beat fastest” and “Repetition doesn’t ruin the prayer.” In Bangalore, India, workers put on Smith face masks as they posed for selfies with the man himself. Smith had presided over 11 years of explosive growth, a period when Intuit had secured its place in the Silicon Valley pantheon, and the tour was like a long party. Last fall, Intuit’s longtime CEO Brad Smith embarked on a farewell tour of the company’s offices around the world.
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