Intuit’s secret campaign to block free tax filing

Intuit expects to pull in around $4.5 billion in revenue this fiscal year, an increase of better than 6 percent, and it predicts that its earnings per share will jump by at least 10 percent. To preserve that income, Intuit is secretly fighting a proposed program that would allow the IRS to calculate taxes for people who request it — because that would reduce the income Intuit earns from its tax software and tax-fiing service.

Intuit is so concerned that it has spent $11.5 million lobbying against it, working with a right-wing antitax crusader to create a fake grassroots movement to convince politicians that the public opposes free tax filing, as reported by Pro Publica and NPR.

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What’s keeping Intuit CEO Brad Smith up at night is “return-free filing,” a voluntary alternative to hiring a tax preparer or using commercial tax software. Note the word “voluntary.” No one would be forced to use the program, and it’s based on information from banks and employers that the government already receives. Essentially, if you’re the kind of person who has a simple return, you could ask the IRS to do your tax return for you and send you the bill.

It’s likely that those who would opt in are lower-income and elderly tax payers who either can’t afford to pay a tax preparer or aren’t tech-savvy enough to use the tax-preparation software that is the core of Intuit’s business.

Even so, Intuit calls the program “anti-consumer” and claims it would result in higher tax payments for those who use it.

Intuit plays the cynical AstroTurf game But if Intuit really believes that, why is it not advocating against the program publicly? Instead, it’s playing the Washington “AstroTurf” game and jumping into bed with Grover Norquist, who hates the federal government so much he wants to shrink it until “it’s small enough to drown in the bathtub.”

AstroTurfing — named after the fake grass you used to see at ballparks — is a term for setting up a group that purports to be made of regular folks, the grassroots, but is really a front for an interest group. Here, according to Pro Publica, is how Intuit has been AstroTurfing the “return-free filing” issue:

Over the last year, a rabbi, a state NAACP official, a small-town mayor, and other community leaders wrote op-eds and letters to Congress with remarkably similar language opposing return-free filing.

They warned that return-free filing would be a conflict of interest for the IRS and would especially hurt low-income people, who wouldn’t have the resources to fight inaccurate returns. Rabbi Elliot Dorff wrote in a Jewish Journal that he “shudders at the impact this program will have on the most vulnerable people in American society.”

“It’s alarming and offensive” that the IRS would target “the most vulnerable Americans,” two other letters said. The program, which was supported by both Ronald Reagan and Barack Obama, is a government “experiment” that would mean higher taxes for the poor, two op-eds argued.

Rabbi Dorff says he was approached by a former student, Emily Pflaster, who sent him details and asked him to write an op-ed alerting the Jewish community to the threat. What Pflaster did not tell him is that she works for a PR and lobbying firm with connections to Intuit and the Computer & Comunications Industry Association, which includes Intuit.

There’s more, but you get the idea. Before I go further, here’s what Intuit has to say about this: The company works with many types of groups to support “taxpayer empowerment,” and “we feel all points of view deserve to be heard,” Intuit spokeswoman Julie Miller tells me. “Return-free minimizes the taxpayers’ voice and instead maximizes revenue collection for government,” Miller wrote in an email. “That kind of anti-consumer policy does not advance taxpayer rights.”

Intuit has every right to spend money on lobbying in defense of its own interests. I don’t dispute that. But it should not do so secretly.

Big tech money talks — against your interests Large tech companies are using their huge stores of cash to lobby and contribute tens of millions of dollars to candidates running for state and federal office they hope will further their interests — not ours. In the 2012 election cycle, tech companies contributed $64.5 million to political campaigns, according to the Center for Responsive Politics. And last year, 10 of the largest U.S. technology companies spent more than $61 million lobbying Washington in 2013, according to an analysis of records filed by Consumer Watchdog earlier this year.

Apple, Facebook, Google, and Microsoft spent some of those millions to influence the government’s hand on such antiworkforce issues such as raising the cap on H-1B visas. Cable and broadband providers lobbied to block the spread of community-owned fiber to the home.

By and large, the tech industry is no different than the giants of banking and energy that want to avoid regulation or win approval of key projects. Silicon Valley, though, claims to hold itself to a higher standard and talks endlessly about changing the world through innovation.

But when it comes to losing a little bit of profit, it’s amazing how those noble sentiments quickly disappear.

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This article, “Intuit’s secret campaign to block free tax filing,” was originally published by InfoWorld.com. Read more of Bill Snyder’s Tech’s Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.