🗄️ TurboTax’s “free”-filing lawsuit

Wednesday, March 30, 2022 by Robinhood Snacks |
TurboTax before the modern tax season [James Keyser/Getty Images]

TurboTax before the modern tax season [James Keyser/Getty Images]

TurboTax before the modern tax season [James Keyser/Getty Images]

TurboTax before the modern tax season [James Keyser/Getty Images]

Yesterday’s Market Moves
Dow Jones
35,294 (+0.97%)
S&P 500
4,632 (+1.23%)
14,620 (+1.84%)
$47,214 (+0.47%)

Hey Snackers,

Definitely spring for the extra legroom: Cathay Pacific is rerouting its NYC-Hong Kong long-haul to avoid Russian airspace. The new route would be the world’s longest commercial flight by distance. ETA: 17 hours — enough to watch “The Batman” once.

Stocks jumped and oil fell as investors monitored developments in Russia-Ukraine peace talks. Russia said it would “drastically” reduce its military presence near Kyiv, but US officials are skeptical.


W-2 anxiety is real… Tax season is here, and TurboTax is Intuit. Intuit is the financial software powerhouse behind TurboTax, Credit Karma, and QuickBooks. Its specialty: making finances less #anxiety-inducing, with hand-holding walk-throughs and user-friendly screens. Now, Intuit has some anxiety of its own — and it’s not the April 18 filing deadline.

  • The FTC sued Intuit yesterday over what it’s calling TurboTax's "deceptive" marketing, with the aim of blocking TurboTax from advertising its services as “free.”
  • The consumer protection agency said that two-thirds of US taxpayers couldn’t qualify for TurboTax’s free offering last tax year — and many don't find out they need to pay until later in the process, after they’ve already entered info.
  • Intuit says “simple returns” can be filed free, and that last year 17M people filed for free on TurboTax.

Upgrade to claim your tax break... While most countries provide easy online services where taxpayers can file free of charge, free options in the US are more complicated: fill out a paper form, manually enter everything into a digital form, or file through private tax software (but only if you earn $73K or less). Intuit said it’s been focused on boosting free filers. Still:

  • Tax-prep companies like TurboTax and H&R Block reportedly spent millions lobbying against legislation that would’ve allowed the IRS to simplify filing.

Complexity is a biz opportunity… because consumers will pay extra to have headache-inducing (but critical) processes simplified. The US’s convoluted tax system is bad for taxpayers, but great for companies like Intuit and H&R Block — if taxes were a cakewalk, fewer people would likely need their services. (It’s a similar convo for the hard-to-navigate healthcare industry: companies like Teladoc, GoodRx, and Zocdoc thrive on simplifying experiences.) This week, President Biden released a budget proposal that includes $14B for the IRS, but TBD if any of that will go toward creating a simpler filing system.


Let’s BeReal… nobody wants to curate every moment for Instagram. That’s fueling the growth of BeReal, a new “unfiltered” social app that’s gaining traction with college students (1M+ downloads last month alone). How it works:

  • Whatever you’re doing at 2:30 pm… is what your friends see. Every day, BeReal users are prompted to take a selfie and front-facing pic at a random time. Users have two minutes to take their filter-free pics, and can’t post more.
  • The anti-Instagram: BeReal doesn’t allow “likes” and discourages “lurking” by making users post before seeing their friends’ pics. Instead of sushi in Tulum, you get Cheeto hands in bed.

Not the first Facebook alternative… Lots of upstarts have challenged Meta’s social supremacy with features like photo tagging, stories, and live audio. FB kept its crown by buying them (Insta), copying them (Snap/TikTok), or watching ’em fade (Clubhouse). But now FB faces a more fundamental challenge: growing skepticism of its engagement-driven algorithms.

  • Algo-anxiety: A WSJ investigation last year revealed that FB knew Insta’s algorithm was linked to depression, anxiety, and eating disorders in teens.
  • Shrinking base: FB’s total users declined last quarter for the first time, and the number of young adults on FB has been falling since 2019.
  • Reversing course: This month, Insta launched a chronological feed, a rare step back from algo-fueled ordering — though it can’t be set as default. Twitter recently made a similar move.

It’s easy to rip off a new feature… but it’s harder to overhaul an entire biz model. Even if BeReal is just a fad, it points to an existential problem for the social-media incumbents: younger users are gravitating toward platforms with fewer features focused on their friends. But for social giants that rely on algorithm-powered ad revenue, fewer features may mean fewer advertisers.

What else we’re Snackin’

  • Boost: The FDA authorized a fourth shot of Pfizer’s and Moderna’s vaccines for people 50 and older (aka: a second booster). The authorization comes as a new Omicron subvariant makes its way through the US.
  • Game: Sony is merging its two PlayStation game-streaming services into a single $10/month subscription (dubbed: PlayStation Plus). The bundle is Sony’s answer to rival Microsoft’s XBox Game Pass.
  • Truckin’: GM is boosting production of its electric Hummer as reservations top 65K — nearly double what was expected. OG carmakers are rushing to meet the demand for their EVs, but supply constraints aren’t helping.
  • Stretch: Soft pants FTW. Shares of Lululemon spiked after the athleisure juggernaut said it hit $6B in sales last year, and is expecting to top $7.5B this year as it expands into new categories like shoes.
  • Clicker: TV-ratings powerhouse Nielsen is being taken private in a $16B buyout from a group of PE firms. Nielsen’s been losing its stronghold on audience data as easier-to-quantify streaming gains steam.

Snack Fact of the Day

Chris Rock’s comedy-tour ticket sales have surged, with minimum prices up nearly 8X from before the Oscars


  • Earnings expected from Paychex and Dave & Buster's

Authors of this Snacks own: shares of GM, Moderna, Microsoft, Twitter, Pfizer, and Snap

ID: 2102217