IRS-Funded Review Confirms TurboTax Hid Free Filing From Search Engines, but Says There’s No Need for Major Changes — ProPublicaOctober 9, 2019
A four-month outside review of the IRS’ partnership with the private tax software industry to provide free tax preparation offered mixed conclusions: It found serious problems in the program and confirmed ProPublica’s reporting this year that companies, including Intuit, the maker of TurboTax, had hidden the free option from search engines. But the report, written by an IRS contractor that has previously supported the industry’s position, also defended the program’s oversight.
The review did not recommend sweeping changes. The mandate of the review was to narrowly assess the program to “ensure the continued operations and integrity of the Free File Program.” It did not examine the broader question of whether the premise of the program is sound or look at the IRS’ role in tax filing.
The IRS has not yet said how it will respond to the report, which is dated Oct. 3, and whether Free File will change for the 2020 tax season. Consumer advocates said they were disappointed by the lack of proposals for reform.
Under the Free File program, the tax prep companies promise to offer free options to 70% of filers, or around 100 million people who make under $66,000. In exchange, the IRS pledges not to create its own filing system, a development that would pose a grave threat to the industry.
The IRS retained McLean, Virginia-based MITRE Corporation, a major agency contractor, following congressional pressure sparked by a series of ProPublica stories outlining how lower- and middle-income Americans had been tricked into paying for tax prep they could have gotten for free. That included Intuit adding software code to the Free File landing page of TurboTax that hid it from search engines like Google, a practice the company ended only after ProPublica reported it.
The 134-page (plus appendices) review, copies of which were obtained by ProPublica, confirmed that Intuit and four other of the 12 companies that signed on to Free File used code to hide their landing pages. It also found that seven of the companies purchased ads for keywords related to free tax filing that directed users to their commercial offerings and away from Free File, as ProPublica documented.
The MITRE team conducted in-person interviews with 29 taxpayers in Chicago to test the Free File program. The results confirmed hundreds of taxpayer accounts collected by ProPublica — and a 2008 report by the IRS itself — that Free File is hard to find and use. The Chicago tests…