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Taxing Software Experiences

By Ed Foster, Section The Gripelog
Posted on Mon Apr 28, 2008 at 11:58:57 PM PDT

Every year I try to publish all the significant gripes I get about tax software before April 15th, in the hopes it will keep some last-minute tax filers from choosing the wrong program. But, except for one short piece we had about H&R Block's TaxCut earlier this year, that proved impossible as the complaints about the 2007 tax-year software flooded in. And it wasn't going to help to weed out the bad apples anyway, because it seemed like just about all of the programs came in for criticism on support, accuracy, or even privacy grounds. So instead, I gave myself an extension and now file this late return on the 2007 tax programs for future reference.


As is the case every year, the largest number of complaints concerned Intuit's TurboTax. "This year TurboTax got my Massachusetts state return flat wrong, and I had to do something that's probably illegal to avoid being cheated out of $60," one reader wrote. "I'm a federal employee under the old Civil Service Retirement System (CSRS), which is not under Social Security. My CSRS withholding is shown on my W2 in a different box than Social Security, Medicare, etc. In the past, TurboTax added the amounts in the two boxes for MA returns, so there was no problem. Not this year - it just left out my CSRS deductions. I tried manually adjusting the correct line in the MA form -- no dice. When I tried to e-file the state, TurboTax informed me that MA accepted only the amount shown in the Social Security box for e-filing, which I find hard to believe. I had to change that amount, which is probably illegal, but which I can justify if I ever have to."

A TurboTax Deluxe Online Edition user ran into a problem he thinks shows a bigger issue regarding Intuit. "While preparing my 2007 taxes the other week, I came across a child care credit calculation page with a programming glitch. They were accidentally showing the same value twice, and after subtraction, always ending up with a deduction of zero. Of course, my first concern was that my taxes would be wrong. So I called them, waiting 40 minutes to speak with a rep. After the rep provided very helpful assistance by verifying that my taxes would be submitted correctly, things got really strange. I asked him if they needed any information to report the broken web page in the app, and he wouldn't even acknowledge the question. Instead, he robotically went into a repetitive 'we're sorry you're unsatisfied' cycle each time it was mentioned. What started as me simply trying to help them turned into a bizarre defensive back-and-forth via the phone and email. I've tried four different times to report that their application is broken in one spot, and they don't want to hear anything about it! It's very telling that their enormous support website has absolutely no way whatsoever to report a technical defect in their product. Oh, well. One would think that Intuit would have a vested interest in the quality of online offerings, but it turns out that the opposite is the case. It's a bit scary when you think about it."

Less well-known tax software vendors came in for questions about their accuracy as well. "I spent an hour reading the terms and agreements of the sites the IRS lists for free e-filing, and after eliminating those I wouldn't trust because of aggressive demands, I chose TaxSlayer," a reader wrote. "BAD mistake. It turns out they require accepting third-party cookies from advertisers, and then they tried to charge me $10 for the free service. So I went back to my old reliable, TaxAct, to calculate my 1040. And it's a good thing I did. The amount I owed the feds was almost half of what TaxSlayer was saying I owed."

But while some swear by 2nd Story's TaxAct, others swear that using it has resulted in increased spam. "I found a column you did several years ago relating to TaxAct and spam, but I can beat that," a reader wrote recently. "I'm getting spam to unique, tagged addresses given only to them. And I'm not talking spam advertising their software, I'm talking about male enhancement spam and the like from botnets. TaxAct has apparently allowed a large chunk of private data to escape, and apparently, not for the first time as someone else I know says they had the same problem with their lists in June 2006. I wish I'd known before I gave an e-mail address to them last year. We don't know how much other data TaxAct has is escaping, but there are botnet spammers out there who have a list which not only contains TaxAct customers, but is known to the sender to be a list of TaxAct customers. Sounds ready-made for phishing."

Exactly what any of the tax software vendors do and do not do with information they can collect about their customers is very much an open question. After I published the TaxCut story, several readers wrote to point out one newspaper's product comparison that raised concerns over H&R Block's privacy practices. "What really caught my attention was that it looks like TaxCut tracks its customers using Omniture, the same outfit you wrote about planting the '2o7.net' spyware for Adobe," one reader wrote. "This is absurd. We should not have to read through the privacy policies of the vendors and all their partners to find out what they get to do with our tax information."

And of course there's not much reason for reading all those privacy policies now, because by the time the 2008 tax-year software is out, all those terms will have changed, probably for the worse. So which tax software alternative will you try next year, and why? Post your comments below or write me at Foster@gripe2ed.com.

< Terms of Ridicule | Comcast Gets Nominated for Worst ToS >


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Taxing Software Experiences | 12 comments (12 topical) | Post A Comment
no problemo[ Reply to This ] (none / 0) (#1)
by Anonymous User on Tue Apr 29, 2008 at 05:22:47 AM PDT

I find pencil, form, and calculator work best. IRS wants me to efile to same them money but that's their problem!

[ Reply to This ]


re: no problemo[ Parent | Reply to This ] (none / 0) (#6)
by regis on Thu May 01, 2008 at 10:22:25 AM PDT

I efile my tax return every year so I can get my refund in a week or so. I don't do it to save the the feds money. They'd probably argue that efiling costs them money anyways. Of course they'd also argue processing paper returns cost them money as well.

[ Parent | Reply to This ]


Fed government[ Reply to This ] (none / 0) (#2)
by nytmare on Tue Apr 29, 2008 at 06:28:16 AM PDT

I wonder if the Federal Government has any better luck getting errors in tax software corrected. Because every error in tax software means an error on thousands or millions of individual returns. How do they deal with that? I don't know of any penalties for causing widespread errors, so what incentive to tax software makers have to keep their products accurate? My state of PA has had online filing over the web for a long time and it works well. I hope the federal government will adopt this practice soon because I cannot trust any of the third-parties that are currently required in order to e-file.

[ Reply to This ]


TaxSlayer not so bad[ Reply to This ] (none / 0) (#3)
by Anonymous User on Tue Apr 29, 2008 at 10:10:05 AM PDT

Reader wrote: "BAD mistake. It turns out they require accepting third-party cookies from advertisers, and then they tried to charge me $10 for the free service. So I went back to my old reliable, TaxAct, to calculate my 1040. And it's a good thing I did. The amount I owed the feds was almost half of what TaxSlayer was saying I owed." That hasn't been my experience with TaxSlayer, now two years running. Nothing about advertisers' cookies, and the Federal return was indeed free. The state return was $9.95, but they were upfront about that. As to the amount owed, that depends entirely on the data furnished to them in preparing the return.

[ Reply to This ]


Still TaxCut to me. :)[ Reply to This ] (none / 0) (#4)
by TonyK on Wed Apr 30, 2008 at 06:20:13 AM PDT

Used TurboTax one year, 1988 I believe. It mis-figured an amount and caused me no end of headaches with the state and federal taxing authorities.

Starting in the mid-90's I started using TaxCut. Its been a good program for me though I refuse to e-file any longer because of privacy concerns with the 3rd party filers.

It is for this reason I won't do online tax services. I don't trust them with my personal and financial information.

[ Reply to This ]



I should add[ Parent | Reply to This ] (none / 0) (#5)
by TonyK on Wed Apr 30, 2008 at 06:34:21 AM PDT

having just read that wonderful PDF someone posted, I can say that TaxCut did not spam me, that I can tell.

See I run a firewall and get prompted when something wants to send information. Generally I say no unless I'm doing an update. And then the rules are not permanent. :)

But... having read that PDF I may give TaxAct a try for 2008.

Thanks,

[ Parent | Reply to This ]



Why should we have to use a vendor at all??[ Reply to This ] (none / 0) (#7)
by MrsPost on Thu May 01, 2008 at 11:23:57 AM PDT

The IRS lets folks under a certain income e-file with them for free. Everyone else has to go through a vendor. There's some ridiculous line in their explanation about not wanting to compete with third parties.

Excuse me? When did filing our taxes become something that should require a third party?

Yes, I know. Paper returns are free. But how long until that's no longer the case? The list of 'approved vendors' seems split into two:

  • Completely untrustworthy
  • Competely unknown and therefore untrustworthy
  • And one of those little tidbits. You can deduct the cost of having your taxes prepared from your taxes due. So essentially the federal government (our money) is paying these people!

    I used TaxAct because my accountant neighbor recommended it. It matched my paper return completely. But it still needed a 'processing fee' to do the direct deposit.

    Time to write our congresscritters and see why we can't e-file directly.

    [ Reply to This ]



    As I recall there was a lawsuit[ Parent | Reply to This ] (none / 0) (#10)
    by Reziac on Tue May 06, 2008 at 10:57:22 AM PDT

    .. there was a lawsuit brought by the tax software companies against the IRS when the IRS initially offered free online tax filing, for being "anti-competitive". The tax software companies WON and the IRS had to stop offering the service.
    ~REZ~
    [ Parent | Reply to This ]


    IRS is broken ... Period.[ Reply to This ] (none / 0) (#8)
    by Anonymous User on Fri May 02, 2008 at 08:06:15 AM PDT

    Our tax system is ridiculous.  I have a MS in Software Engineering and I still can't determine if I filing my taxes correctly - even after hours of investigation.  I was never a supporter of a flat tax, but I am beginning to see it's advantages.  If it puts legions of CPA's, tax preparers out of work, I'd be will to pay to re-train them - but something needs to be done.  

    The IRS should allow direct e-filing for everyone.  I use TaxCut and have been relatively happy with them.  I always file via the USPS - I refuse to pay these third parties for a service that should be free.  Filing Colorado taxes is relatively easy, you can even file using the phone.  What a load of crap the federal system has become.  


    [ Reply to This ]



    Been Using TurboTax[ Reply to This ] (none / 0) (#9)
    by srynas on Mon May 05, 2008 at 05:56:28 AM PDT

    I haven't had a problem with TurboTax; nevertheless every time I use it, I am left with a "bad" taste.

    1. The program is riddled with advertising to get me to "upgrade".  Your supposed benefits from upgrading are not made clear.
    2. TurboTax comes in three versions. This type of program should only have one version.  Intuit is very unclear about the substantive difference between the various versions.  It also generates a level of uncertainty about whether your taxes are being done "correctly".
    3. The TurboTax "interview" process in one screen failed to work.  I was able to get around this by going directly to the tax form. So the "problem" was fixable even though there should not have been a problem
    4. While not really a TurboTax problem, some tax calculations could not be traced, they simply disappeared. For example, certain tax calculations have a threshold. If it is above the threshold you enter an amount into Form XX - if not, there is no entry on that form.  However, TurboTax does not show why an entry was not made if it falls below the threshold, the net effect is that it looks like an incomplete calculation. Again, I don't blame Intuit for this, though I would like too.

    [ Reply to This ]



    Just for the record[ Reply to This ] (none / 0) (#11)
    by Reziac on Tue May 06, 2008 at 11:02:38 AM PDT

    ... I've been using TaxAct Online for 4 or 5 years now, because they're the only one that consistently has ALL the federal forms. All the others charge for Schedule E and sometimes other forms as well. (Also, their website is very simple, thus fast, and doesn't constantly try to sell you upgrades -- you get one upgrade offer and that's it.)

    Anyway, I have not seen the subsequent spam noted by one poster, tho I don't doubt that in the course of electronic filing, sometimes our data does get hijacked, much as has happened with banks, medical records, etc. As to whether it happens at the filing site or at the IRS... seems to me either could happen.

    ,

    ~REZ~
    [ Reply to This ]



    No spam from TaxAct[ Reply to This ] (none / 0) (#12)
    by rodak on Wed May 07, 2008 at 10:51:00 AM PDT

    I used to use TaxCut, but I got tired of paying for it every year (I used to get the free MS-Money after rebate, then sell MS-Money on eBay, but that got to be too much hassle). I used TaxAct this year, and was VERY pleased with it. Totally free, free electronic filing - can't beat that! I used a unique email address for them (taxact@mydomain.com) and have not received a single piece of spam directed to that address. I HAVE, however received spam in directed to "taxcut@mydomain.com", but not a lot of it.

    [ Reply to This ]


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