Intuit uses fears of Black population to reject free tax returns

U.S. Internal Revenue Service recently announced plans to test a free online system, which has met with resistance

WASHINGTON – The government’s plan to introduce a free, online public tax return system is facing opposition from Intuit, the company behind TurboTax.

TurboTax is a software package for preparing U.S. income tax returns.

The U.S. Internal Revenue Service (IRS) recently announced plans to test a free online system, which has met with resistance.

Intuit suspects that a free IRS tax return tool could be detrimental to Black taxpayers, citing a study on racial disparities in audits of the IRS.

However, ProPublica, an American online news service, has revealed that Intuit’s opposition to Direct File is financially motivated.

Researchers told the news website that the company is specifically targeting Black and brown people to stoke fear of the Direct File tool because these groups are critical to Intuit’s profit margins.

TurboTax, while a leader in the online tax return industry, has faced criticism and accusations of misleading customers with claims of “free” tax returns.

The Federal Trade Commission recently ruled that a fraud case against Intuit can proceed.

In 2014, ProPublica reported on an Intuit-led campaign against the free tax return, which pre-fills tax return data in a manner similar to other countries.

Now the IRS wants to develop an online tool similar to TurboTax, which will soon undergo a test run.

In Nevada and Arizona, local figures opposed the system proposed by IRS, saying it would give too much power to the website IRS.

It is likely that the IRS will continue its pilot program next tax season, despite industry opposition.