I am a chump who uses TurboTax every year. Having seen a few cases of the IRS going after someone I knew, I just pay the danegeld.
Perhaps I do not need TurboTax, but I know that the laws at the state and federal level change every year and that I have no real ability to track any of this, but the penalties can be high for failure. I rarely understand tax jargon, in any case; I always feel like I am on the back foot of some "clever" debate team tactic of convenient definitions.
So, aside from just the lobbying aspect -- which is not trivial -- I would say that the general terror of the IRS (Al Capone, after all, fell to them), the shifting territories of tax law, and the jargon barriers also contribute to keeping TurboTax in business.
This used to be me. Here's the problem: I never understood how my tax was calculated. And thus, I could never be in real control of my own finance. "How much tax would I need to pay if I sell these stocks now?", "How much should I put into retirement this year, and why?" These were the questions I constantly asked myself and never had good answers to, due to my lack of understanding of the tax code. Never again.
What does "IRS going after" mean here? I've been filling my taxes by hand, and back when I used some "free" online thing, I had problems multiple times and the IRS basically just sent me a bill saying what I owed and I payed it. (Doing it myself has proven more reliable.) Contrary to popular belief, it's not a crime to make a mistake on your taxes. So what happened that you're so concerned about?
An example, from this year: a friend received a letter from the IRS. They were about to levy something in the order of ten thousand dollars. I will mention that the tax return that year had been prepared by a family friend of theirs who worked for the IRS. I have no further details at the moment.
Perhaps you are not fussed by the prospect, but I do not ever want to get a letter from the IRS telling me I need to pay them ten thousand dollars.
Of course I don't, but I guess the question is: would they have owed that much anyway? My thought was that the IRS just billed you what you should have payed already plus maybe some interest. So if you get a $10k bill, it's an unpleasant surprise but doesn't that mean they just messed up and should have payed that 10k (less some interest) a few months earlier?
The answer is I don't. Even tax experts seem to make mistakes, as pointed out. Faced with that, I tread lightly. Remember, the IRS has worked very, very hard to get a certain kind of reputation and there are knock-on effects from that.
Also, as one of two full-time working parents, with a nanny, and some other income, I do not have time for this crap. Yes, I'm getting shafted by Intuit and their lobbying, and I know it. I hate myself every year that I pay for TurboTax but then I have a glass of wine in the evening and forget about it.
Also, we buy it at Costco for a 5-seat license and split it amongst family. That takes the cost down to something much more edible.
Perhaps I do not need TurboTax, but I know that the laws at the state and federal level change every year and that I have no real ability to track any of this, but the penalties can be high for failure. I rarely understand tax jargon, in any case; I always feel like I am on the back foot of some "clever" debate team tactic of convenient definitions.
So, aside from just the lobbying aspect -- which is not trivial -- I would say that the general terror of the IRS (Al Capone, after all, fell to them), the shifting territories of tax law, and the jargon barriers also contribute to keeping TurboTax in business.