TurboTax software maker Intuit Inc. apologized to its customers Thursday for forcing many to upgrade to more expensive versions this tax season.
An open letter signed by TurboTax general manager Sasan Goodarzi said the company failed to tell customers clearly enough that it had made the software changes.
Longtime users of TurboTax‘s Deluxe software found out this year that they needed a more expensive version to handle the same tax forms that Deluxe handled last year. Mostly, they learned it after buying 2014 software and beginning work on their taxes.
“I deeply regret the anger and distress we have caused those of you affected by this change,” Goodarzi’s letter said.
The letter also offers $25 rebates for those who used Deluxe to file their 2013 taxes a year ago and had to upgrade to TurboTax Premier or Home & Business to file their 2014 returns.
A website to claim the $25 was to be available early Friday.
The company also said it would send emails starting Friday to customers who used Deluxe last year.
Taxpayers who stumbled into the changes had hammered TurboTax with poor ratings and reviews on Amazon.com and elsewhere.
Some complained that the upgrade cost them $40. Others said Intuit had provided free upgrades when they called to complain.
H&R Block Inc. sought to capitalize on the miscue by offering its tax preparation software free to those who showed they’d bought TurboTax Basic or Deluxe software.
Block’s offer stemmed in part from TurboTax’s removing a key form from its basic software version this year.
TurboTax Basic for the 2014 tax year doesn’t allow users to file form 1040 with Schedule A, which they need to itemize common deductions such as mortgage interest payments and charitable contributions instead of taking a standard deduction.
The open letter of apology did not mention the change to TurboTax Basic.
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The open letter
To our valued TurboTax desktop customers,
We messed up. We made a change this year to TurboTax desktop software and we didn’t do enough to communicate this change to you as proactively and broadly as we could or should have. I am very sorry for the anger and frustration we may have caused you.
Intuit has a long history of doing right by our customers, and in this instance, we did not live up to the standards of excellence you have come to expect from us. We did not handle this change in a manner that respected our loyal customers and we owe you an explanation of what we are doing to make it right.
The change we made to our desktop products, both the download and CD versions, includes removing Schedules C, D, E and F from TurboTax Deluxe, which some long-time customers had relied on to report business income, investment sales and rental property income. As a result, you may now be required to upgrade the version of TurboTax you use even though your tax situation hasn’t changed from last year.
Here’s why we made the change. Over the years, we have worked hard to make it easy for you to choose the TurboTax product that is right for you and your unique tax situation. We want that choice to be clear and confidence inspiring. However, as new online and mobile technologies emerged, our products, and the tax scope and features they included, began to differ, leading to customer confusion. These differences also impeded our ability to introduce new innovations across our entire product line.
So this year, we made the product experience consistent across all TurboTax offerings. This change enables us to innovate faster and make improvements that benefit all customers at the same time, regardless of whether they use our online or desktop software. You can be sure that we’ve preserved what’s unique to our desktop product: the ability to e-file up to five returns, switch to forms mode and install the software on multiple computers.
But good intent must be matched with great execution, and that is where we let you down. We have heard from many of you that you were surprised when you discovered the change. No one likes this kind of a surprise, so we are taking immediate action to make things right and help you through this transition year.
We are giving $25 back if you purchased TurboTax Deluxe desktop software (CD or download) and filed your 2013 tax return and have to upgrade to TurboTax Premier or Home & Business to file your 2014 return. This will help you move to the right desktop product, while reducing the immediate and unexpected financial impact. After completing and filing your return this year, please visit www.turbotax.com/25back to request your $25. (This link is scheduled to be active starting Friday morning.)
I deeply regret the anger and distress we have caused those of you affected by this change. Our customers are the heartbeat of every TurboTax employee. Our hope is that we can regain your trust and demonstrate that our commitment to you has never been stronger.
Sasan Goodarzi and the TurboTax Team
General Manager, Intuit TurboTax