Taxing Software Experiences

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.