ProPublica reports on the shady tactics TurboTax and other tax software companies use to prevent most Americans from filing their taxes for free. According to an agreement with the IRS, tax software companies are supposed to offer a “Free File” product to Americans making less than $66,000 a year. From the report: Here’s what happened when we went looking. Our first stop was Google. We searched for “irs free file taxes.” And we thought we found what we were looking for: Ads from TurboTax and others directing us to free products. The first link looked promising. It contained the word “free” five times! We clicked and were relieved to see that filing for free was guaranteed. We started the process by creating the profile of a TaskRabbit house cleaner who took in $29,000. We entered extensive personal information. TurboTax asked us to click through more than a dozen questions and prompts about our finances. After all of that, only then did we get the bad news: TurboTax revealed this wasn’t going to be free at all. Turns out the house cleaner didn’t qualify because he is a independent contractor. The charge? $119.99.
Then we tried with a second scenario. We went back to TurboTax.com and clicked on “FREE Guaranteed.” This time, we went through the process as a Walgreens cashier without health insurance, entering personal information and giving the company lots of sensitive data. Again, TurboTax told us we had to pay — this time because there’s an extra form if you don’t have insurance. The charge? $59.99. But wait. Are the house cleaner and the cashier not allowed to prepare and file their taxes for free because of their particular tax situations? No! According to the agreement between the IRS and the companies, anyone who makes less than $66,000 can prepare and file their taxes for free. After doing some digging in the source code, ProPublica found that TurboTax had branded them as “Non Free File Alliance” or NONFFA.
“Even though TurboTax could tell we were eligible to file for free, the company never told us about the truly free version. It turns out that if you start the process from TurboTax.com, it’s impossible to find the truly free version. The company itself admits this.” Another Google search brought them to a page with two options: “See If You Qualify” and “Start for Free.” The “Start for Free” link brought them back to the version of TurboTax where they had to pay, but the “See If You Quality” link finally took them to the real Free File program.
Read more of this story at Slashdot.