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Practice Blog: Intuit's "Taxes Are Simple With TurboTax" Commercial

January 26, 2016


Most of you have seen Intuit's new commercials. In it is an unsuspecting typical taxpayer performing some minor household chore while using the new TurboTax app for filing income taxes. Entering stage right is a PhD or rocket scientist to help them press a single button on the app or to answer a self-answering question in the TurboTax software. Hilarity ensues.


It is true that the tax filing complexity of the majority of Intuit's consumer-grade tax preparation customers are fairly simple; W-2 earners with a home mortgage, some 1099s from their banks, and a few crumpled donation slips from Goodwill for a couple bags of clothes. Intuit's ultimate goal for these customers is a tax return prepared automatically from either their Mint accounts or the previous year's return and the current year's tax forms imported electronically into their servers in exchange for a yearly or monthly fee. This type of customer is unlikely to go to a professional accountant to prepare their taxes until their financial picture becomes more complex.


Is Intuit undercutting their Lacerte (high-end professional tax prep software) and QuickBooks (bookkeeping)  accountant customers? Yep. They undercut themselves too--giving away tax preparation to lower income filers who only need the 1040-EZ or 1040A.


There is also a form of bait and switch being perpetrated. Intuit has been steadily raising its fees for returns that require extra forms such as the Schedule C and Schedule E, and many of its consumer customers that have been issued a 1099-MISC or some other seemingly innocuous income form have a good chance of being charged a fee comparable to an accounting professional preparing their taxes.


By advertising that filing taxes should be so simple that an organ-grinder monkey could do it, the company is also setting up some customers for costly judgment errors. Nathaniel Jacobson CPAs on-boards customers fairly regularly that are dealing with penalty and interest assessments brought on by overly simplistic do-it-yourself tax software.


We should recognize that Intuit's advertising conduct is their participation in a race of self-immolation among all purveyors of tax prep software and in-office mass-production tax preparation services. Each seeks to stress simplicity over that of accuracy, and speed over cost effectiveness. This is the opposite of the type of service that most accountants offer.


Ultimately Intuit is trying to siphon off the volume of returns that are flowing through accountants and standalone tax practices. While this may have the undesirable effect of increasing the price to those customers that need a more sophisticated tax service, in the end it is probably a gift to all of us, customers and accountants alike, of the most precious commodity--time. Accountants will gratefully use that extra time to improve their service to their customers, and to assist customers in areas other than tax.

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