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TurboTax software changes spark free offer from H&R Block

McClatchy-Tribune Information Services

January 19, 2015

KANSAS CITY, Mo. — This year’s tax wars between H&R Block and TurboTax maker Intuit have erupted over their competing software packages and filers’ access to mundane forms.

Each company is offering free software to consumers in the wake of changes Intuit made to its software packages that caught many customers off guard.

Kansas City-based H&R Block hopes it can capture some of those surprised TurboTax users for its own.

"I was going to use TurboTax this year, but I said ‘No, this isn’t going to happen,’" said Charles Coody, a longtime TurboTax user in San Antonio, Texas. "Why should I buy a Cadillac when I want to buy an F-150 pickup?"

Coody, and lots of other TurboTax users, are unhappy about changes in what comes with Intuit’s Basic, Deluxe, Premier and other versions of TurboTax software this year. Many are finding that they have to upgrade from the TurboTax software package they had last year — and pay more — to get the same tax help this year.

For example, the Basic TurboTax package a year ago handled a federal 1040 form and Schedule A — the one taxpayers need to itemize their deductions instead of taking a standard deduction. Schedule A helps those with enough deductions, often interest payments on a home loan, to lower their tax bills and boost their refunds.

This year, TurboTax Basic doesn’t handle Schedule A. It tells buyers they need to upgrade to the Deluxe package. Intuit cut the price of Basic but users aren’t happy with paying more to get Deluxe.

Similarly, prior Deluxe users are finding that this year’s version doesn’t handle other schedules — such as Schedule C for reporting gains or losses on stock sales — that it handled last year, requiring them to upgrade as well.

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"Like buying a Business Class seat and finding yourself in Coach," said the headline on an unfavorable review of TurboTax Deluxe posted on Amazon.com by "Karl" of Bozeman, Mont.

"Let me join the chorus of long-time customers who are absolutely furious with Intuit for downgrading the capabilities of TurboTax Deluxe so that it can no longer do what it has done for many years …" Karl wrote in his one-star review. "The product instead informs me that I require Home & Business (which I never needed before) and I must pay another $40."

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As of last week Wednesday, 89 percent of the Amazon reviews had awarded only one star to TurboTax Deluxe. Some of those poor reviews have triggered a reply from TurboTax vice president Bob Meighan, or others from TurboTax on his behalf.

"We know that some of our customers won’t be able to use the same TurboTax product as last year," said Meighan’s reply on Amazon to one customer. He told this customer and others to buy the product they normally do and call an 800 number to get the upgrade they need.

A five-star Amazon review posted by Everell Edwards said he was upset by how Intuit handled the changes in Deluxe but "well pleased" that the company gave him a free upgrade to Home and Business. Similarly, another customer posted that she got a free upgrade to Premier, and she gave Deluxe five stars in her review.

Intuit spokeswoman Julie Miller explained the software changes this year as matching the packages to the same help available through TurboTax online service. In an email, Miller said the new software line-up "creates a more consistent experience across TurboTax products and platforms."

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Miller said the company is working with customers "on a case-by-case basis" to answer questions and settle concerns.

"We’re very aware and sensitive to the feedback from customers and understand that changes can be difficult," Miller said.

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H&R Block hopes to capitalize on the difficulty that users of TurboTax Basic and Deluxe software have experienced this year.

"Those packages haven’t changed in 20 years," said Jason Houseworth, president of Block’s digital products.

H&R Block is offering it own Basic and Deluxe software packages free to TurboTax customers. It asks them to email SwitchtoBlock@hrblock.com proof of purchase such as a photo of a store receipt or the download code from the Intuit software.

Houseworth said Block employees noticed the TurboTax changes last November. The counter offer of free Block software is a response to the consumer reaction to those changes.

His hope, of course, is that some of the 28 million taxpayers who use TurboTax will join the 7 million who are Block software customers.

"Once you try it (for free), you’re going to pay me next year," Houseworth said.

Kansas City resident Greg Meyer likes the offer but said his first call will be to Intuit for an upgrade.

"If I don’t get it for free, I’ll consider my options," Meyer said.

Anthony DiGuiesppe, a retired software test engineer in the Philadelphia area, already sent H&R Block a copy of his Costco receipt and plans to take his TurboTax Deluxe back to the store for a refund.

"I was really happy with TurboTax," DiGuiesppe said. "But you expect it to work exactly like it did last year."

He’ll use H&R Block’s software this year and, he said, if it works better he’ll buy Block next year.